Michael Pascoe writes:

It’s an ill wind that doesn’t make some
company filthy rich. Exxon has just blasted away the record books with the
biggest profit in US corporate history – it made $US10.7 billion in just the December
quarter to take its 2005 bottom line profit to an astounding US$36.13 billion.

That fourth quarter profit was earned on sales of $US100 billion. As
MarketWatch
observes, that’s about the size of New Zealand’s economy over a full year.

The profit was more than even the Exxon
bulls expected, pushing up the share price by nearly 3%. The downside,
though, is that such a big net will catch plenty of criticism from consumer
groups about profiteering.

A more considered criticism is that Exxon
should be spending more on exploration when it is making so much money. Part of
the reason for high oil prices is that Big Oil hasn’t been investing enough in
finding more of the stuff. In the decades when oil was cheap, exploration
investment dropped.

Peter Fray

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