Exxon's Record Capital and Exploration Spending
With all of the media and Congressional focus on Exxon's record profits in the second quarter, what gets neglected (along with Exxon's record income tax payments) is the record amount of spending by Exxon on "capital and exploration," coming in at $7 billion in the second quarter 2008 (data here), the highest amount ever spent by Exxon in a single quarter.
"ExxonMobil increased investments across all business lines to help meet global demand for crude oil, natural gas and finished products. Capital and exploration project spending increased to $7.0 billion in the second quarter, up 38% from last year. For the first half of 2008, spending on capital and exploration projects was $12.5 billion."
If the trend continues, Exxon will spend about $25 billion this year on capital and exploration, the highest amount in history (see top chart above). Where are the media reports on Exxon's "record capital and exploration spending?"
The bottom chart above shows some of Exxon's financial results for the first half of 2008, comparing profits, income taxes paid, and capital and exploration expenditures. Note that Exxon has spent more so far this year on income taxes ($20b) and capital expenditures ($12.5b) combined ($32.50) than it made in profits ($22.5b) this year.
Further, note that Exxon's tax rate so far this year is 47%, based on earnings before tax (EBT) of $42.4b and income tax payments of $19.8b, up from last year's rate through the first half of 42.5%. Why doesn't that significant tax hike for Exxon get reported?