Exxon: Kings of 'crack'

Exxon Mobil’s annual analyst meeting this morning in New York has been somewhat predictable given the huge year the Irving-based oil giant had in 2007. The company said it will increase projected spending for 2008 from about $21 billion to $25 billion and will keep up the $25 billion per year rate for the next five years.

An Exxon Mobil steam cracker in Singapore (Exxon photo).

Much of the three-hour event this morning was spent emphasizing how much more efficient Exxon is than competitors, showing how it spent less than Shell and BP (for example) but had net income that was significantly higher and a return of average capital employed that was 75 percent higher than the closest competitor.
“The bottom line, it’s all about execution,” Chairman and CEO Rex Tillerson said.
Exxon Senior Vice President Steve Simon also mentioned in passing how the company’s crackers, units at refineries and chemical plants that break down oil into different components, are up to 5 percent more efficient than those operated by competitors.
That may sound like small potatoes, but cracking is the fundamental process in the refining industry, so that’s a significant advantage. Or, as the Wall Street Journal’s Lee Gomes noted (subscription required)in a column today ” … advances usually come from someone absorbing a massive body of technical knowledge and then finding an incremental improvement.”