Exxon Mobil Refinery Analysis, Research Paper Example

High performing leaders truly believe there is a strong link between their health and their effectiveness as leaders. They feel their drive energy and stamina is related to their improved overall productivity, improved confidence, a positive attitude and the ability to make tough decisions whilst on the job. The health of a company depends upon the health of the leader with particular reference on cognitive skills and ability to motivate employees and deliver products with integrity. I have chosen to peer into the lurks of Exxon Mobil Refining Companies business mission which is “to provide quality product to all customers and meet and exceed all customers expectations through hard work and committed management teams”. This is their vision statement for their local Baton Rouge, LA refinery and most of their other subsidiary companies. “Few stockholders ever complain about their own stock as EM owns some of its own stock.” (Marquit, 2008).

In order to address this mission statement professionally and ethically I must look at the final product that Exxon Mobil Refinery delivers to the customer, define the specifications and determine if they meet the customer specifications and whether EM turns a profit annually for a certain amount of years. Then I must determine what role does management play in this effort? I will finally determine what gap, if any exists and what strategies I suggest to meet the gap.

The business gap tool is used to help a company determine is actual performance with its potential performance. In order to access this I will determine the goal EM set for production for the year or past years and determine if they meet their goals. If they did not then the remainder will represent the gap and that will represent potential loss profit due to situations such as loss production, maintenance, inflation of feedstock, downtime, etc.

“At present EM stock is selling at a profit of $60.48 per share. The price per share has dropped $0.20 in the last week but overall since the stock market crash EM has made money.” (“Exxon Mobil Investors”).  Their net income was $9.9 billion or $1.64 per share. That was an increase of $2 billion from last year. Their quarterly returns for the past year have averaged 276 billion and annual profit of 20 billion. That’s not too shabby when the rest of the world is leading toward a deficit!

The Baton Rouge site can produce 500,000 barrels a day and has one of the largest storage facilities of all the sites including floating and home based vessels. The Russian facility as Stage 1 can produce 250,000 barrels a day and has the ability to store half the capacity it makes. Most of the gasoline produced has already been purchased and is ready to be shipped either to tank trucks or barges for shipment. Only special blend products are normally stored. EM is at its peak months during the summer in terms of production. They operate at only about 10% of the costs of production on net value of stock return.

Exxon Mobil has been turning a strong profit since 1999 right before 9/11 and they have never looked backed. Is it their strong reputation, is it their strong mission statement, and is it their strong managerial collaboration that keeps them turning profits when other companies are losing profits?

Dividend per Share versus EM Net Income

(“Exxon Mobil Investors”)

Stockholders are receiving the share dividend of $60.48 per share as of this date which puts them at the bottom 50% of what other tax payers currently pay despite EM’s continuous profit. So, go out and buy Exxon Mobil stock and make your profits without worrying about getting hit by the almighty government! This is represented by the following chart:

http://www.exxonmobilcomparisontaxpayers.com

An annual report represents all the previous year activities of a company including gains, losses, cash flow, balance sheet, income statement, auditor’s report, mission statement, CEO and Chairman’s report, etc. This is made available to the stakeholders so they can understand the financial position of the company and understand how to invest their money in the future.

EM states as energy demands continue to grow so does the prosperity of the community and the world. They are looking forward to the dual challenge of meeting the customers’ needs whilst staying in compliance with regulatory commissions. “Their note to the stakeholders is that the results of their profits demonstrate their commitment to excel even under the most challenging economic times. They are committed to long-term visions of improving operational efficiency and increasing stakeholder value.” (Exxon Mobil Annual Report, 2009). “In the midst of the global economic downturn of the past year, all three of our businesses – Upstream, Downstream, and Chemical has continued to lead the industry worldwide in performance. Earnings were $19 billion. Return on average capital employed (ROCE) was 16 percent. Cash flow from operations and asset sales was $30 billion. For our shareholders, our leadership in 2009 has allowed us to return value to them. Through our dividends and share buy backs, our Corporation distributed a total of $26 billion to our shareholders in 2009. Over the past five years, we have distributed a total of more than $150 billion to our shareholders.” (Exxon Mobil Annual Report, 2009).

EM has produced over 41 million tons of liquefied petroleum gas which has surpassed their quota for the past year, 2009. Through their LNG projects they are able to meet the demands of existing customers and gain new customer territory. They plan to increase efficiency by 30% by year 2013. They are forever meeting and exceeding the quotas they set because of great communication by management, an excellent vision statement, commitment to meet goals and challenging demands for their product. Without a well-seasoned management team their production levels could not be met and exceeded time after time annually and they would not be turning a profit for employees, stakeholders and the company.

Exxon Mobil is in an excellent position to meet and exceed demands from customers to keep price per shares above market rates. They are committed to conducting business in a manner “that protects the safety, security and health of their employees and those involved with operations, their customers and the public.” (Exxon Mobil Annual Report, 2009).

Total Shareholder Returns

• For 27 consecutive years EM has turned over profitable dividend increases for its shareholders.
• It has total shareholder distributions of $26 billion.
• The net production of oil and gas has been 3.9 million barrels per day including all plants and refineries
• There is no apparent gap in production because EM meets and exceeds their quarterly and annual predictions.
• If there were gaps they could increase production, consider minimizing downtime and increasing output from regular employees versus overtime employees. Another considering factor would be to purchase cheaper raw crude.

References

Exxon Mobil Annual Report (2009) Retrieved June 23, 2010 from, http://thomson.mobular.net/thomson/7/3095/4222/document_0/XOM_SAR09.pdf

Marquit, M. Exxon Mobil (XOM) Management Owns Some of Its Shares Retrieved June 24, 2010 from, http://www.thepanelist.net/ethanol-biofuels-finance-10036/900-exxon-mobil-xom-management-owns-some-of-its-shares

Exxon Mobil Investors (2010) Retrieved June 24, 2010 from, http://ir.exxonmobil.com/phoenix.zhtml?p=irol-stockQuote&c=115024

ExxonMobil Comparison Taxpayers (2010) Retrieved June 24, 2010 from, http://www.exxonmobilcomparisontaxpayers.com