HISTORY

ACCOUNTING, FINANCE &
CONTROL PROJECT WORK
ExxonMobil  is  the  world’s  second  largest  publicly  traded  international  oil  and  gas  company.  
 
“We  hold  an  industry-­‐leading  inventory  of  global  oil  and  gas  resources.  We  are  the  world’s  
largest  refiner  and  marketer  of  petroleum  products,  and  our  chemical  company  ranks  among  the  
world’s  largest.  We  apply  science  and  innovation  to  find  better,  safer  and  cleaner  ways  to  deliver  
the  energy  the  world  needs.”  
 
 
 

 
ALESSANDRO  CHIAVARI/10393412  
ETTORE  CERABOLINI/10356491  
SIMONE  CORTI/10341362  
EMRE  BUYUK/10476157  

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HISTORY

H ISTORY
In 1859, Colonel Edwin Drake and Uncle Billy Smith drill the first successful oil well in
Titusville, Pennsylvania. The colonel's discovery triggers an oil boom that parallels the gold rush
of a decade earlier. ExxonMobil Corp. was formed in 1999 by the merger of two major oil
companies, Exxon and Mobil. Both Exxon and Mobil were descendants of the John D.
Rockefeller Corporation, the Standard Oil, which was established in 1870.
Over the last 125 years ExxonMobil has evolved from a regional marketer of kerosene in the
U.S. to the largest publicly traded petroleum and petrochemical enterprise in the world.

O VERVIEW
“As a top company in the Oil and Gas industry, ExxonMobil specialize in producing Fuels,
Lubricants and Petrochemicals.”
It is not necessarily the oil standard, but ExxonMobil is the world's largest integrated oil
company (ahead of Royal Dutch Shell and BP). ExxonMobil engages in oil and gas exploration,
production, supply, transportation, and marketing worldwide. In 2013, the company reported
proved reserves of 25.2 billion barrels of oil equivalent, including its major holdings in oil sands
through Imperial Oil. ExxonMobil's 31 refineries in 17 countries have a throughput capacity of
5.3 million barrels per day. The company supplies refined products to more than 19,000 gas
stations worldwide (including almost 10,000 in the US). ExxonMobil is also a major
petrochemical producer.
RANKINGS

Top 3 Competitors

5th Place in Fortune Global 500

Royal Dutch Shell plc

S&P 500

BP P.L.C.

Dow Jones Industrials

Chevron Corporation

Dow Jones Global Titans
2nd Place in FT 500

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HISTORY

“We strive to be responsible corporate citizens, and our success along that
path is underpinned by our technological expertise, operational excellence,
safety performance and unwavering ethical standards.” Rex W. Tillerson

Management Board

Board Committees

Andrew P. Swiger

Audit Committee Charter

Darren W. Woods

Compensation Committee Charter

Jack P. Williams

Board Affairs Committee Charter

Mark W. Albers

Finance Committee Charter

Michael J. Dola

Public Issues and Contributions Committee Charter

Rex W. Tillerson (CEO)

Executive Committee Charter

The Board appoints Committees to help carry out its duties. In particular, Board Committees
work on key issues in greater detail than would be possible at full Board meetings. Each
Committee reviews the results of its meetings with the full Board.

E XXON M OBIL

AS AN I NDUSTRY

ExxonMobil Corp. explores, develops and distributes crude oil and natural gas. The company
through its divisions and affiliated companies, engages in its principal business, is energy,
involving exploration for, and production of, crude oil and natural gas, manufacture of petroleum
products and transportation and sale of crude oil, natural gas and petroleum products. It
manufactures and markets commodity petrochemicals, including olefins, aromatics, polyethylene
and polypropylene plastics and a variety of specialty products. The company also has interests in
electric power generation facilities. It operates business under three segments: Upstream,
Downstream and Chemical.
The Upstream segment is organized and operates to explore for and produce crude oil and
natural gas.
The Downstream segment manufactures and sells petroleum products. The refining and
supply operations encompasses global network of manufacturing plants, transportation systems,

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The Chemical segment operates to manufacture and sell petrochemicals. absorbed Mobil Oil as a wholly owned subsidiary.5 Million Worldwide. Esso began life as the Anglo American Oil Company in 1888.808 Shareholders ≈2. the newly incorporated Mobil Corp. in 1972 and established Exxon as a trademark throughout the United States. Mobil: Marketed around the world. in 1966. lubricants and services. simply Mobil Oil Corp. lubricants. aromatics. Mobil is known for performance and innovation. ExxonMobil markets fuels and lubricants under three brands: Exxon: Exxon-branded fuels. A decade later. Key Financials Stakeholders Million of US$ Suppliers ≈160. and. services and lubricants around the world. In other parts of the world. polyolefin's. Esso: Esso-branded fuels.580 Countries 120 Assets 346. 4 . It was the first foreign affiliate of John D Rockefeller's US Company the Standard Oil Trust. Exxon and its affiliated companies continued to use its Esso trademark. It supplies olefins. Socony-Vacuum became Socony Mobil Oil Co. In 1955. Mobil is recognized for its advanced technology in fuels.000 Profits 32.000 Revenues 407. Jersey Standard changed its name to Exxon Corp.666 Employees ≈75.HISTORY and distribution centers provides fuels. services and lubricants based in US. and a wide variety of other petrochemicals. and other high-value products and feedstocks to customers.

The highlighted points from those glances are. Customers.STRATEGY OF EXXONMOBIL CORPORATION S TRATEGY OF E XXON M OBIL C ORPORATION ExxonMobil has a steadfast commitment in becoming the world’s premiere publicly owned petroleum and petrochemical company. natural gas and petroleum products. Mission Statement of the Company: “ExxonMobil Corporation is committed to being the world's premier petroleum and petrochemical company.” Further to its mission statement. we must continuously achieve superior financial and operating results while simultaneously adhering to high ethical standards. Employees and Communities. "Taking on the world's toughest energy challenges. As we mentioned earlier. consists of multiple divisions and companies. First strategy of those is to increase long-term value of the company by delivering profitable growth: a result that can be achieved only by sustaining operational excellence and selectively invest in high-value opportunities. and production of. Exxon is ranked 2nd by net income among the major international oil and gas companies. 5 . To that end. ExxonMobil Corp. manufacture of petroleum products and transportation and sale of crude oil. respectively. The other step that should be taken in order to attain the main goal is emerging as the leader in all the activities Exxon is involved into. Shareholders: We are committed to enhancing the long-term value of the investment dollars entrusted to us by our shareholders. starting from their three main divisions: Upstream. crude oil and natural gas. as stated in the letter to the shareholders." The saying above is accepted as main slogan of the company and shows us the company’s ambition in the energy sector they operate. Downstream and Chemicals. two minor strategies can be defined. involving exploration for. Exxon Mobil explains its strategy under four main point of view: Shareholders. Those divisions and affiliated companies of the company operate or market products in the United States and other countries of the world. To accomplish this goal. As of 2014 data. Customers: Success depends on our ability to consistently satisfy ever changing customer preferences. Their principal business is energy.

valued products and services to our customers 3. Apply effective risk management. those segments’ strategies should be taken into account. company will provide the high quality product and achieve the customer satisfaction throughout the world. Maintain capital discipline 6 . To build on this advantage. they are recruited the potential and retain the high quality people because they know that the high quality of employees is the company’s greatest strength and will make the corporation well positioned for ongoing success in the long term. Provide quality. Lead industry in efficiency and effectiveness 4.” Moreover. Exxon Mobil has also given importance substantially to its main segments: Upstream.STRATEGY OF EXXONMOBIL CORPORATION Employees: We are committed to maintaining a safe work environment enriched by diversity and characterized by open communication. Exercise a disciplined approach to investing and cost management 4.Maximize profitability of existing oil and gas production Downstream segment’s strategies are ordered as: 1. and operational excellence 2. Communities: We commit to be a good corporate citizen in all the places we operate worldwide. safety. and fair treatment. Develop and apply high-impact technologies 5 . From the Exxon Mobil mission statement. This investment is one of the Exxon Mobil guiding principles: “The exceptional quality of our workforce provides a valuable competitive edge. by developing the quality employees. trust. For the premier perspective. automatically. Capitalize on integration across ExxonMobil businesses 5. which is premier. Upstream segment’s strategies can be summarized into: 1. we can see that Exxon Mobil Corporation is focusing on three aspects. we will strive to hire and retain the most qualified people available and to maximize their opportunities for the success through training and development. Downstream and Chemical when the company built its strategy. Maintain best-in-class operations 2. furthermore. Identify and selectively capture the highest-quality resources 3. financial and ethical standard. According to data from annual report 2013 of the company.

Focus on businesses that capitalize on core competencies 3. Build proprietary technology positions 4. increased reliability. we came up with the following Balanced Scorecard. respecting the main and minor strategies of the company related to every perspective. and lower operating costs. Furthermore. the men and women of ExxonMobil form the foundation for strong operational performance. Consistently deliver best-in-class operational performance 2. These systems enable continuous improvement in safety performance. The point of Exxon Mobil’s view on this matter tells us “Operational excellence begins with exceptional employees. proven management systems are rigorously employed at ExxonMobil facilities across the globe and are incorporated into daily operations. Maximize value from leading-edge technologies Chemical segment’s strategies can be highlighted: 1. Operational Excellence is underlined multiple times. It is a culture built by decades of past and current employees’ dedication to doing the right things.” All in all. We are proud of the culture of excellence reflected in the daily accomplishments of our employees around the world. Driven by our talented and committed workforce. we found distinctive indicators in order to assess the position of the company due to achieve its strategies linked to fundamental aim. Selectively invest in advantaged projects As we can clearly see from the strategies of company.” Apart from the point that has done above. “Operational excellence underpins everything we do at ExxonMobil and is critical to delivering profitable growth. 7 . the right way. and not accepting compromises to our values. Backed by comprehensive management systems. Capture full benefits of integration across ExxonMobil operations 5.STRATEGY OF EXXONMOBIL CORPORATION 6. it is also mentioned in the annual report 2013.

METHODOLOGY M ETHODOLOGY This Balanced Scorecard we adopted follows the methodology proposed by Kaplan and Norton. chosen as a peer competitor. whenever possible. 8 . In order to make it easier to the reader to have a comprehensive view of the company and of the scorecard we collected every critical thought made upon the indicators directly into the final chapter. In the final part of each indicator’s section are shown the calculations (when some data has to be manipulated). Together with the description and the formula there will be a “Methodology” paragraph that explains why that indicator has been chosen. Chemicals. and when available the comparison with British Petroleum (BP). We started from the understanding of the Vision and main corporate Strategy of ExxonMobil and subsequently moved toward the specific indicator. that can be considerate like specific industries themselves: Upstream. Downstream. called “Critical Analysis”. While respecting the Kaplan and Norton division in 4 parts we were also focused on finding indicators that could. give a valuable insight of the tre main sectors in which ExxonMobil operates. if needed. results (which can appear both in tables or in graphs). Moving into each perspective the reader will find a brief description of each of the indicator provided along with the explained formula used in the calculation.

  INTERNAL   PERSPECTIVE   CUSTOMER   PERSPECTIVE   FINANCIAL   PERSPECTIVE   Increasing  long-­‐ term  value           Becoming  leader  in   each  of  its  activity   EPS   FCFF   ROCE   CAPEX  REVENUES   Raising   Shareholders’   Value   Enhancing   Generation  of  Cash   Increasing   Operational   Profitability   Investing  in  High-­‐ Value   Opportunities   Brand  Equity   Value   Increasing   Worldwide   Visibility   Product   Portfolio     Adding  New   Product   Groups   Sales  Volume   Distance  of   Delivery   Market   Share   Increasing   Sales   Reducing   Logistics   Cost   Stabilizing   Market   Share   GHG   Emissions   Chemicals   Production   Capacity   Production   Repl.   &  Utilization   Rate   Extraction   cost  per   barrel   Providing   Better   Environ.   Increasing   Chemical   Production   Balancing   Extraction   Capacity   Improving   Downstream   Volume   Oper.  gender.  Rate   Refining  Cap.   minority   Spill  Incidents   Process/Personnel   Safety  Events   Employment  o f   diverse  workforce   Keeping  up  with   the  Environmental   Balance   Increasing  Safety  in   Workplace   9 .METHODOLOGY Being  the  world’s  premiere   petroleum     and  petrochemical     company             LEARING  &   GROWTH  PER.   Excellence   Employment  Rates   by  region.

650 533 48% -1. such as depreciation. Methodology FCFF is one of the primary concepts in valuing a company. depletion. Calculations.711 2010 8.820 11. receivables.FINANCIAL PERSPECTIVE F INANCIAL P ERSPECTIVE I NCREASING G ENERATION OF C ASH – FCFF The Free Cash Flow to Firm is a measure of financial performance that expresses the net amount of cash that is generated for the firm.248 2010 48.170 34. ∆𝑁𝑊𝐶 is the change in Net Working Capital (payables. This indicator fits very well the oil and gas companies because it enables to compare companies by setting aside the very high level of costs associated with non-cash items. a risk that needs to be mitigated.410 26.645 2011 55.760 13.440 22. stable cash flows can prove a company’s ability to hedge risks without impairing operations.670 132 42% 11.g. allocated to all of its investors. new plants. FCFF = EBIT ∗ 1 − Tax  Rate + D&A ± ∆NWC ± CapEx Where: Tax Rate is the average company’s tax rate. amortization.230 460 39% 4. and consists of expenses. can move up or down significantly in the short-mid period. maintenance of existing ones).980 247 42% 24.475 2012 56.061 All the data are in million of US$ Table 1 10 .690 540 24% -2.920 14.930 454 N/A N/A 2011 13.500 15. D&A stands for depreciation and amortization.029 2013 44.295 British Petroleum Cash Flow from Operations (CFO) – Capital Expenditures (CapEx) Interest Expense Tax Rate Free Cash Flow to Firm 2009 17. inventory). Results & Comparison ExxonMobil Cash Flow from Operations (CFO) – Capital Expenditures (CapEx) Interest Expense Tax Rate Free Cash Flow to Firm 2009 28.870 259 41% 21.430 548 43% 6. as it is a clear measure of the ability of the company to generate more cash than it spends.130 492 39% 2. To this end. which are related to supply.270 327 39% 22.350 30.820 11.472 2013 13. 𝐶𝑎𝑝𝐸𝑥 is the capital expenditure in fixed assets (e. Furthermore.910 33. demand and political scenarios. commodity prices. taxes and changes in net working capital and investments.882 2012 12.

880 253. Methodology ROCE is a performance measure ratio used in capital-intensive and long-term oriented industries. the book value of assets is not.060 62.770 20% 24% 22% 16% 11 . Consequently revenues increase with inflation while capital employed generally does not (as the book value of assets is not affected by inflation).800 346.320 302.630 77.510 64.510 331. It is used to compare the performance of two businesses and for assessing whether a business generates enough returns to pay for its cost of its capital.710 261. such as Oil and Gas.540 269. taking the average of the opening and closing capital of the year.090 210. Instead of using the capital employed at an arbitrary point of time we prefer to use the Average Capital Employed.375 42.600 272.FINANCIAL PERSPECTIVE I NCREASING O PERATIONAL P ROFITABILITY – ROCE Return on Capital Employed is a financial ratio that measures a company’s profitability and the efficiency at which its capital is employed. Thus. as its numerator is EBIT. Thus.570 246. ROCE should always be higher than the rate at which the company is borrowing. ROCE = EBIT Capital  Employed The Capital Employed as shown in the denominator is the sum of shareholders’ equity and debt liabilities. It is accrual based. older businesses with depreciated assets will tend to have higher ROCE than newer.210 57.260 239.560 58. otherwise any incremental borrowing will reduce shareholders’ earnings. The main drawback of ROCE is that it measures return against the book value of assets in the business.720 181. As these are depreciated the ROCE will increase even though cash flow has remained the same. Results & Comparison ExxonMobil Total Assets – Current Liabilities = XOM Capital Employed Average Capital Employed EBIT ROCE 2009 2010 2011 2012 2013 233. In addition. possibly better businesses.050 333. to show whether the capital has been used wisely or not. Calculations. while cash flow is affected by inflation.140 71.660 275. and can be calculated as: Total Assets – Current Liabilities.810 52.540 43.

900 188.850 184.960 43.570 36.910 53.25 16.250 17. Methodology EPS is the key indicator when we focus on the shareholders’ value as this ratio is a main driver of the stock price: even though cash flow and free cash flow are more instructive.830 3.85 2012 6.290 16% 17% 9% 10% All the data are in million of US$ Table 2 I NCREASE SHAREHOLDERS ’ VALUE – EPS It represents the portion of a company’s profit allocated to each outstanding share of common stock.28 10.110 12.030 0.790 -0.580 4.390 120.620 18.730 0.060 4.580 184.930 0.37 British Petroleum Net Income After Extraordinaries Preferred Dividends Net Income Available to Common Basic Shares Outstanding EPS 2009 10.620 1.01 ExxonMobil does not allow preferred stock.950 1.FINANCIAL PERSPECTIVE British Petroleum Total Assets – Current Liabilities = Capital Employed Average Capital Employed EBIT ROCE 2009 2010 2011 2012 2013 146. Therefore.890 140.120 173.23 2011 41.13 2011 16. Results & Comparison ExxonMobil Net Income After Extraordinaries Basic Shares Outstanding EPS 2009 19.420 7.610 115.69 2013 32.280 139.900 0.030 18.26 6. Table 3 12 .410 18.730 52.960 109. Calculations.030 1.43 2012 44.280 4. Net Income are in million of US$.28 150 18.410 1.99 2010 30.990 134.830 136.190 127. dividends declared on preferred shares are subtracted before calculating the EPS.57 2010 -2. It is calculated as follows: EPS = Net  Income − Dividends  on  Preferred  Stock Average  Outstanding  Shares Preferred stock rights have precedence over common stock.870 8.3 -2.670 137.880 4.910 46. the market pays attention to and reacts to earnings.37 2013 15000 1.860 13.890 6.950 21.950 19.630 9.460 4.

832 26.107 1. New  PPE = Old  PPE   +  CapEx   −  Depreciation.913 2011 33.828 All the data are in million of US$ 45.148 17. an important information is to see where the company is spending money and how the earning are affected by the investments.000   15.097 3.383 2012 36. Even though the overall ROCE already provides a valuable measurement. Figure 1 13 Earnings  –  Million  of  US$   Capital  Expenditures  –  Million  of   US$   Table 4 . Calculations.000   10.215 24.000   Upstream   Downstream   Chemicals   35.000   5.000   35. CapEx can be calculated as follows. Results & Comparison ExxonMobil Upstream CapEx Downstream Chemicals Upstream Earnings Downstream Chemicals 2009 20.449 3.000   40.000   40.000   5.091 2.439 4.000   15.084 2.000   25.000   30.000   0   0   2009   2010   2011   2012   2013   Bars represent CapEx and are quoted on the left axis.000   30.895 13.505 2.704 3.000   10.567 4.FINANCIAL PERSPECTIVE I NVESTING IN H IGH -V ALUE O PPORTUNITIES – C AP E X AND E ARNINGS Capital Expenditure (CapEx) is a measure of the funds used by a company to acquire or upgrade physical assets such as property.000   25. the management of the company also needs absolute data which is related to the specific division. industrial buildings or equipment (fixed assets).898 2013 38.262 1. Property and Equipment).000   20. lines (Earnings) are quoted on the right one.309 2010 27. but ExxonMobil already published the data in the “Financial and Operating Review”.841 3.000   20.120 1.418 29.   (PPE = Investments in Plant.450 34.231 2.459 4.781 2.196 3.413 1.319 2.190 3. Methodology In order to understand the direction of the company.

32% 87.153 84.765 90. Results & Comparison ExxonMobil Upstream Liquids production (net.185 2. thousands of barrels per day) World Liquid Fuels Production (thousands of barrels per day) World Liquid Fuels Consumption (thousands of barrels per day) MSup(%) MSdwn(%) 2009 2010 2011 2012 2013 2.014 4.475 7.932 4.253 5. MSup (%) = 100 * (average production per day) / (Global production per day) MSdwn (%) = 100 * (throughput per day) / (Global consumption per day) Calculations. it well fits its role.48% 6.07% 14 . because it well describe trends in customers’ choices among company and competitors.688 7.175 5.350 5. thousands of barrels per day) Upstream Oil-equivalent production (natural gas production) (net. Being a relative indicator.135 7. Standing to the available data.07% 5. MS (%) = 100 * (unit sales) / (total market unit sales) Methodology Market share is a key indicator for attractiveness of the company.85% 90.585 84.89% 89. MS(%) has to be proxied with two different formulas for the upstream and downstream sections.01% 88.75% 5.239 4.506 4.422 2.86% 6. thousands of barrels per day) Downstream Refinery throughput (.202 3.387 2.CUSTOMERS’ PERSPECTIVE C USTOMERS ’ P ERSPECTIVE S TABILIZING M ARKET S HARE – M ARKET S HARE P ERCENTAGE Market share percentage describes the part of the market under control of the company in comparison to the overall market.214 5. since it bypass problems that can rise from the variance that characterizes oil market.375 87.335 7.493 87.483 7.16% 5. It helps to evaluate primary and selective demand in market.312 2.447 4.920 89.

352 2.825 25.791 2.174 5.887 24.891 25.063 2009 2010 2011 2012 2013 7.460 2. Results & Comparison While BP doesn’t have a Chemicals division.175 7. since BP provides its sales volume in a global value of thousands of barrels per day.CUSTOMERS’ PERSPECTIVE British Petroleum Upstream Total hydrocarbons (thousands of barrels per day) Downstream Refinery Throughput (thousands of barrels per day) MSup(%) MSdwn(%) 2009 2010 2011 2012 2013 2. ExxonMobil Petroleum product sales (thousands of barrels per day) Chemical prime product sales (thousands of tons) 2009 British Petroleum Total refined product and crude oil sales (thousands of barrels per day) 2010 2011 2012 2013 6. Calculations.85% 2.157 24. Methodology Sales volume is an absolute index that gives an idea on how much appealing are the Company’s products for the customers.78% 2.711 .413 6. and a growth in this parameter represent an effective growth of the overall company name.58% 2.428 6.426 2. In the case of petroleum products and chemicals they are presented in thousands of barrels per day or thousands of tonnes. while XOM propose the volume sales shifted between thousands of barrels per day of petroleum product sales and thousands of tons of chemical prime product sales.47% 1.414 6.80% 2.585 Table 6 15 7.98% 2.492 2. The big drawback of such an index is that it becomes less meaningful when huge fluctuations in relevant variables out of control of the company occur.225 2.66% 2.319 2.308 7. a direct comparison can’t be truly done.98% Table 5 I NCREASING S ALES – S ALES V OLUMES Sales volume are data collectible from public documents such as official annual reports.354 1.006 24.

suggesting a higher risk of stockout too. looking at the divisions geography around the world. A high value of the indicator presumes high costs of connection & stock. Results & Comparison There are not available public data about the Company’s network. Calculations. 16 .CUSTOMERS’ PERSPECTIVE R EDUCING L OGISTIC C OSTS – D ISTANCE OF D ELIVERY The average distance of delivery from production represents the interconnection between different Company’s departments. and a quantitative value could be computed only internally. The two following maps well describe how the two companies tend to serve with all the divisions the well-known and flourish markets. As it says it’s the average distance between the places where the refinery physically takes place and the selling stores. while they prefer to consolidate only the upstream in weaker and developing markets. Methodology It allows understanding how geographically interconnected production and delivery departments are. Although a wider view can be analyzed.

since a big range of very technical products is directly related on the D&R invested in it and the results achievable. From a customer point of view. synthetic fluids & lubricant. specialty elastomers and tackifying resins. for a total portfolio size of 67 different products. Methodology The Portfolio describes the differentiation of the products and the number of the potential customers. 17 . butyl rubber. it also tastes the quality itself. with a smaller portfolio. Indeed the only Chemicals market in which British Petroleum compete is synthetic fluids & lubricant.CUSTOMERS’ PERSPECTIVE A DD ı NG N EW P RODUCT G ROUPS – P ORTFOLIO OF P RODUCTS The size of the portfolio is the number of products the Company offers in a specific field. polymer modifiers. hydrocarbon fluid and oxygenated fluid. polypropylene. chemical intermediates. Calculations. Results & Comparison ExxonMobil Chemicals division has a portfolio that covers polyethylene products. Overall ExxonMobil Chemicals counts 30 different trademark polymers products & 37 different trademark chemicals & fluids. British Petroleum has not a Chemicals division and neither has products in all the markets ExxonMobil compete. plasticizers.

Results & Comparison Calculations are made by financial analysts as Forbes or Bloomberg or otherwise by specialized Brand analyst such as Millward Brown. being the go-to company for the world’s most difficult and risky exploration. consumers. more consumer friendly voice.CUSTOMERS’ PERSPECTIVE I NCREAS ı NG W ORLDW ı DE Vı S ı B ı L ı TY – B RAND E QU ı TY V ALUE Brands embody a core promise of values and benefits consistently delivered. In this aspect ExxonMobil continued to build its brand around technical excellence. Methodology At the heart of a brand’s value is its ability to appeal to relevant customers and potential customers. Calculations. 18 . investors and others stakeholders. Brands provide clarity and guidance for choices made by companies. nowadays it is becoming more and more important to know what the customer think about the company and the strength of the brand itself. Even if in the past this value was not relevant for an Oil&gas industry. But nowadays even ExxonMobil uses a less technical.

to the transforming and delivery of these resources to customers. extracting and processing of hydrocarbon resources. As you can see in the next pair of data images.INTERNAL PROCESS PERSPECTIVE I NTERNAL P ROCESS P ERSPECTIVE P ROVIDING BETTER ENVIRONMENT Greenhouse Gas emissions have a strong warming effect on the climate but have a relatively short lifetimes in the atmosphere. Results & Comparison ExxonMobil in figures: we can see that the 2013 results are quite the same of the 2012.GHG EMISSION . It is measured in metric tons of Greenhouse gas emission/ 100 metric tons of throughput or production Methodology Instead of using the Net equity CO2 equivalent emission we think this ratio is more effective for a quick understanding of the percentage of emission made by ExxonMobil facilities. As for the BP there isn’t the normalized indicator but only the Net Overall Indicator. but this 19 . the two data are very different. Oil&Gas companies generate GHG gases in almost every aspect of their work. so to emphasize the continuous but slowly process to reduce the GHG emission through every process of the company. Calculations. from the finding. so to understand how much of the gas they are producing are environmental effective or not.

6 billion proven BOE (barrels oilequivalent) added BP 2013 Replacement Rate: 129% O PERATIONAL EXCELLENCE 1. B ALANCING EXTRACTION CAPACITY . improved recovery. to extract one single barrel of crude oil in the upstream segment. It is a very important ratio because if for instance it falls below 100%.P RODUCTION REPLACEMENT RATE The reserve-replacement ratio measures the amount of proved reserves added to a company's reserve base during the year relative to the amount of oil and gas produced. political factors (for example in the Iraq region). divided by production Methodology This is one of the primary metrics used to assess an oil and gas company because it measures the amount of added proved reserves relative to the amount of hydrocarbon produced. including the operating and capital costs.E XTRACTION COST PER BARREL Cost substained by the company. then the company is depleting its own reserves and will eventually run out of oil. purchases and sales of proved reserves. 20 .INTERNAL PROCESS PERSPECTIVE has to be related to the quantity of oil processed by the two companies. It is calculated as extensions and discoveries. to be recoverable from well established or known reservoirs with the existing equipment and under the existing operating conditions” Calculations. revisions. We calculated it backwards as follows: Extraction cost per barrel = Revenues per barrel – Earnings per barrel Methodology The cost of pumping a barrel of oil out of the ground depends on a variety of factors. including the size and accessibility of the field. See how the definition of proved reserves is: “Quantity of energy sources estimated with reasonable certainty.5 billion proven BOE added . Results & Comparison ExxonMobil 2013 Replacement Rate: 103% 1. from the analysis of geologic and engineering data.

so to make the higher margin.76     33.82   2010    53.21       British  Petroleum   Revenues   Earnings   Average  Total  Costs   2009    56.97     84.29      16. This data is very important to see how a company is able to sustain the lower costs. Revenue per barrel of oil equivalent (BOE) of production is tied closely to the prevailing market price for oil and gas.INTERNAL PROCESS PERSPECTIVE also the difference between onshore and offshore extraction is one of the major creator of the difference in the cost.32   2012    102.70     86. calculated on the base of the data for every geographical division used by the companies.33     58.56   2013    69.71     38.24      14.68      19.58      11.41      15.26      11.55     84.80     47. Results & Comparison (dollars  per  barrel  of  net  oil-­‐equivalent  production)   ExxonMobil   Revenues   Earnings   Average  Total  Costs     2009    45.45     52. It is also very important to a company to maintain the costs under the BEP (Break even point) so to make no losses on the oil. earnings and revenues.33   2011    68. Calculations.08     45.69                           Profit  Margin   ExxonMobil   British  Petroleum   2009   26%   20%   2010   28%   21%   2011   31%   17%   2012   28%   15%   2013   25%   15%   (thousands  of  barrels  per  day)    Net  Oil  Production   US   Canada  /South  America   Outside  America   2009    384      267     1671   2010    408      263     1693   21 2011    423      252     1586   2012    418      251     1466   2013    431      280     1964   .40   2013    99.18   2010    73.04      14.08   2011    101.10      15. This indicator in conjunction with production figures is used to examine revenue and costs on a per-unit-of-production basis.66      17.12     49.31         (dollars  per  barrel  of  net  oil-­‐equivalent  production)   2012    68. In the following we’ve reported the worldwide average of costs.11      20.

At facilities of companies owned 50 percent or less. They are an industry leader in integration with more than 75 percent of the refining operations integrated with chemical or lubricant production.INTERNAL PROCESS PERSPECTIVE I MPROVING DOWNSTREAM VOLUME – R EFINING CAPACITY U TILIZATION RATE & Refining capacity is the stream-day capability to process inputs to atmospheric distillation units under normal operating conditions. The company has world-scale manufacturing facilities in all major regions of the world. the greater of either that portion of capacity normally available to ExxonMobil or ExxonMobil's equity interest is included. These annual averages include partial-year impacts for capacity additions or deletions during the year. so it has to be calculated how much a company uses its own refinery in comparison to the ideal capacity Calculations. I NCREASING CHEMICAL PRODUCTION – C HEMICAL PRODUCTION CAPACITY ExxonMobil Chemical is one of the largest chemical companies in the world. with a unique portfolio of commodity and specialty businesses. Methodology ExxonMobil hold an ownership interest in 31 refineries with distillation capacity of 5.3 million barrels per day and lubricant basestock capacity of 126 thousand barrels per day. The throughput of all the refineries is not the maximum capacity. called “Figure 2”. which provides unique optimization capability across the entire value chain. and their products serve as the building blocks for a wide variety of everyday consumer and industrial products. expressed as a percentage. Capacity volumes include 100 percent of the capacity of refinery facilities managed by ExxonMobil or majority-owned subsidiaries. averaged over an extended period of time. The refinery utilization is calculated as the annual throughput (thousands of barrels per day) divided by the average crude distillation capacity. 22 . Any idle capacity that cannot be made operable in a month or less has been excluded. less the impact of shutdowns for regular repair and maintenance activities. Results & Comparison Data is showed in the following page’s graph.

driven by manufacturing of industrial and consumer products both for worldwide export and to serve the growing Asian middle class.0     Total  worldwide    2000.0     BP    1000. So taking into account the demand. Over the next decade. Also to be consi  7000.0     North  America    5000. and add ethylene glycol production. Asia Pacific has accounted for more than two-thirds of global chemical demand growth since 2000.0      -­‐     2009   2010   2011   2012   Figure 2 23 2013   . enabling North American producers to export chemical products competitively to growth markets around the world. driven by improving prosperity in developing countries Growing chemical demand is spurring new capacity investments around the globe.Most chemical demand growth is in Asia Pacific. and we expect this trend to continue. the total production of chemical in ExxonMobil facilities has to be increased year by year and Exxon is going to do it increasing capacity of exhisting facilities and also building new facilities in particular in North America and also in developing countries where an expansion is being progressed that will increase the site’s ethylene and polymer capacity.0     Europe    4000. This has greatly improved the global competitiveness of existing assets. particularly in North America with its abundant supplies of natural gas liquids.0     Asia  Pacific   Middle  East/Other    3000. ExxonMobil expects global chemical demand to grow by 50 percent.INTERNAL PROCESS PERSPECTIVE Methodology Worldwide chemical demand growth improved in 2013.0     Thousands  of  Barrels  per  day    6000.

Results & Comparison Worldwide  Produc@on  Volumes  (thousands  of  tonnes)   9.000   0   2009   2010   2011   2012   24 2013   .000   8.000   Polyethylene   4.000   Polypropylene   3.000   Ethylene   5. Calculations.000   Paraxylene   2.000   7.000   6.INTERNAL PROCESS PERSPECTIVE dered that Singapore is now ExxonMobil largest integrated petrochemical complex and accounts for about one-fourth of the company’s global chemical capacity.000   1.

the company determined human factors. procedures and training that prevent the uncontrolled release of hydrocarbons and hazardous substances. helps them continue to improve their company and remain a responsible corporate citizen. Three significant strategies are explained below due to clarify the position of the company for achieving these goals: S AFETY I N W ORKPLACE – S AFETY E VENTS Personnel and process safety incidents are taken as an indicator for assessing the workplace safety. allowing them to develop and enhance prevention strategies more effectively. 6 workers were fatally injured in 5 incidents related to Exxon Mobil operations in 2013. Many people. After careful analysis. and their stakeholders represent multiple viewpoints. However. the graphs below demonstrate the figures for loss of primary containment: 25 . This. Since the inclusion of XTO Energy in 2011. they have reduced their workforce lost-time incident rate by 45 percent. Process Safety: Process safety refers to equipment. Personnel Safety: When compared with 2012. in turn. The dialogue the company develop with their stakeholders helps them understand all points of view and maintain a global perspective on their most material issues.LEARNING & GROWTH PERSPECTIVE L EARNING & G ROWTH P ERSPECTIVE ExxonMobil builds relationships with a diverse group of stakeholders through timely and transparent communication. Energy issues are complicated.process safety events. As well as the safety events. During 2013. procedures and preventive maintenance were the primary contributing elements to the occurrence of these events. organizations and communities are impacted directly by — and have a direct impact on — ExxonMobil’s business. Exxon Mobil had 61 Tier 1 -represents incidents resulting in a loss of primary containment. the company’s workforce lost-time incident rate decreased by nearly 9 percent.

British Petroleum (BP) reported 6 fatalities. and they foster the ideas. therefore. perspectives. in terms of desired safety level in workplace.6 thousand people. We. That is the reason why we have chosen a non-financial indicator which basically gives us the figures and let us compare both figures. Dı VERS ı F ı CAT ı ON ı N E MPLOYMENT – E MPLOYMENT R ATES G ENDER AND Mı NOR ı TY BY R EG ı ON . We are easily able to see abundance of data from their annual report which supports this strategy the company pursue enthusiastically. ExxonMobil has operations around the world. British Petroleum. The regional allocation of employments is shown in the pie graph and the employees in US are made up the biggest piece of the pie which constitutes 30. skills. Results and Comparisons: In 2013. According Tier 1 process safety events.LEARNING & GROWTH PERSPECTIVE Methodology It is clear that figures in incidents in workplace happened during 2013 allow us to assess the position of the company through comparisons with its competitor. Currently. Exxon Mobil also encourages diversification in their workforce palate. knowledge and cultures of the company’s diverse employees. chose employment ratios by geographic region and by women and minorities as an indicator. the graph collected from the company’s website shows us the BP’s figures in safety events happened over 4 years. almost half of 26 . about 75 thousand people are employed by the company and as every international company.

we can see from the annual report of BP that management was made up about 27 percent of women in 2013. promotions.9 thousand workers. Moreover. 27 . operations and our hiring programs include outreach to identify diverse candidates. and wage and salary administration.S. In that sense. training. The smallest number is allocated to Latin America. we have chosen this non-financial indicator to assess Exxon Mobil in order to position among its competitors. transfers. Methodology Figures in employment by region as well as women and minority numbers are the significant elements in terms of defining diversity. to increase the representation of minorities in company’s U. This was 14% in 2000. Furthermore. Results and Comparisons: According to annual report of BP. as 3. A total of 22% of group leaders came from countries other than the UK and the US in 2013. ExxonMobil promotes leadership opportunities for women and works to improve the gender balance within the company through all aspects of the employment relationship. When it comes to minorities in group leadership. 28 percent of the leaders belonged to this category in 2013. hiring.LEARNING & GROWTH PERSPECTIVE the cumulative employee number. including recruitment.

the graph below demonstrates the figures in spilled oil to land and water.000 barrels in 2013. thus. decreased to 74 spills. 28 . According to annual reports. Spill performance. The number of hydrocarbon spills greater than 1 barrel in 2013 was 7 percent lower than in 2012. should be taken as an indicator. more than 60 percent was recovered at the spill sites.7 million barrels of petroleum and chemical products through approximately 8. Exxon Mobil transport approximately 2. Methodology One of the key factors of operating without harming the environment is to avoid spill incidents so that we have taken spill performance as an indicator.000 miles of pipelines throughout the world every day. Results and Comparisons: The resources of BP shows that the number of oil spills over one barrel (159 litres. the total volume of hydrocarbons spilled to soil and water was 11. 42 US gallons) that reached land and water. Plus.LEARNING & GROWTH PERSPECTIVE K EEP ı NG U P W ı TH THE E NV ı RONMENTAL B ALANCE – S P ı LL I NC ı DENTS Exxon Mobil is focused on implementing preventive measures to avoid spill incidents and ensuring a rapid response if spills do occur.

those sub strategies of Exxon should be highlighted: 29 . In particular. comparing the free cash flow of Exxon and BP.CRITICAL ANALYSIS C RITICAL A NALYSIS As it can be read over the report. The company delivered earnings of $32. a sustained focus on safety and the collective commitment of company employees and contractors around the world resulted in improved overall safety performance versus 2012. The company achieved strong operating and financial performance this year despite global economic challenges and uncertainty. By looking into details. (60% higher than BP). First of all. Over the last five years. while distributing $25. in terms of increasing operational profitability. In most companies this can be caused by a loss in a competitive advantage. Even if this ratio has slightly decreased in the last two years. it still remains an evidence of the strong commitment that ExxonMobil makes high value investments. Robust operating cash flow enabled ExxonMobil to fund $42. in line with industry conditions. we can notice that Exxon has been healthier during the last years. providing shareholders' with always increasing dividends and probably building a solid financial base.6 billion and a return on capital employed of 17 percent. that is also due to the decrease in the price per barrel. ExxonMobil distributed $131 billion to its shareholders. ExxonMobil achieved strong financial and operating results in 2013 and continued to advance a unique and balanced set of profitable growth opportunities across its businesses. ExxonMobil also has maintained its relentless focus on operational excellence and risk management. Moreover.5 billion in capital and exploration expenditures to advance large. while dividends per share have increased by 59 percent.9 billion to shareholders in the form of dividends and share purchases to reduce shares outstanding. new projects and bring energy to world markets. but given the nature of the commodity industry. including an 11 percent increase in the second quarter of 2013. To this end. we established a few critical highlights with respect to financial perspective. However a decreasing Free cash flow is a negative sign as it's symptom of margin (as you can see from table1 costs remain quite stable). we believe that ExxonMobil continues to provide high return on capital employed ratios. Earnings were lower in 2013. while its leadership position within the industry continues in many key areas.

First. moreover Exxon's strong long-term focus may cause short-term profit to decrease. In addition. that affects for sure the earnings. with a warning loss between 2012 and 2013. the XOM goal of increasing sales have not been reached. they have increased the Capital Expenditure steadily from 2009 to 2013. what emerges from the maps is that both BP and XOM have very solid networks in developed markets of North America. achieving better results than 2010. Selectivity not velocity in their approach to capital investment – it is not about how much you spend but also what you spend on that counts. A strong focus on operating excellence Moreover. 2. In fact. but they will surely do afterwards.g. but overall the results can confirm a stable market share detained by ExxonMobil. in fact Exxon went into high-value projects (e. while the index cannot be computed. it has lost market capacity. it has been able to increase the size of sales of a relevant value between 2012 and 2013. This increase does not have a clear effect on the immediate earnings. On the other hand BP experienced differently: managing a smaller amount of products. 30 . Considering the customer perspective. An explanation for this could be the price of barrel. Exxon’s EPS has been increasing continuously from 2009 except for 2013. as they went down from the $34 billion in 2011 to almost $27 billion in 2013.CRITICAL ANALYSIS 1. we made following statements to clarify the company’s position. Finally. Exxon has adopted different strategies for the investments in the three main divisions. That may be the sign that energy efficiency and the proprietary technologies developed and owned by Exxon in these two work-intensive areas has brought a competitive advantage in these industries. For what concerns the Upstream. Next. considerations on the geography of divisions could be interesting. The same criticism cannot be done for BP which has not recovered yet. both XOM and BP global market shares of upstream and downstream are slowly decreasing with the rise of the world demand and consumption. since sales have been diminishing since 2010. This trend suggests that other competitors are emerging or have increased their production. As a result. this allowed its price per share to rise higher that it was before the 2009 financial crisis. the jointventure with Rosneft about technologically advanced drills in Antarctica) that will not bring earnings or competitive advantages as long as the price of oil stays low. Downstream and Chemicals on the opposite side show a negative trend (2009-2013) in CapEx which has no clear effect of the earnings. Commitment to driving capital productivity 3.

but it is the chemical industry that has the higher normalized emission. As well. Brand value is a typical indicator given to the companies by external surveys. at $34 per barrel.69 per barrel. For less profitable or emerging markets both the companies are trying to consolidate the upstream presence. but is still an high production cost with respect to the current oil price. while BP is more orientated to Mediterranean Africa. On the other hand. $84. and if they don’t recover the oversupply will be an issue that may have a serious impact on the financial statistics for the next few months/years. that well remains profitable and operations continue. According to observations we made. It is clear that as long that price of a barrel stays higher than its cost at a certain oil well. as for the one that we at the end take as a reliable source. moreover. Arabia. with a huge range of choices also when customers are dealing with single particular fields. hence production at those wells will be stopped. We can make following comments with respect to internal perspective. BP had experienced merely 20 safety events whereas 61 safety events were occurred during ExxonMobil operations in 2013. Exxon’s average comprehensive cost is $52. XOM is also investing in south-central Africa. where most of the extraction is located. which is significantly lower than British Petroleum. ExxonMobil and BP both experienced 6 fatalities in 2013. they almost reach $60 per barrel. it may happen that extracting oil at certain wells is more expensive than the possible revenue. Moreover. full of technical products. if international supply and demand cause the price to fall. the Production Cost per barrel is very important figure because the Earnings for an Oil and Gas producer. it is the second Oil & Gas company by brand value but it’s also one of the only two public company listed on the top 100 Forbes Brand Value. such as ExxonMobil. are directly correlated to it: Earnings = (Extraction Volume) x (Price per Barrel Production Cost per Barrel). China and Australia. This means that two thirds of Exxon’s production are now harmed by the falling oil prices. In US its production costs are quite low. ExxonMobil portfolio is a heavy one. so it is a great achievement for the reach of new stakeholders for the company. The results of Exxon shows how upstream and downstream produce the overall major quantity of CO2 gasses. Finally. Additionally. but they do not seem to agree on the location of the best investments: if both are in south America.CRITICAL ANALYSIS Europe. It aligns perfectly with the try to reduce logistic costs where the markets are well known. Overall an index that suggests very positive conclusions in terms of customers’ perspective. ExxonMobil had caused 330 spills while 74 spills 31 . further comments could be made about learning and growth perspective.21 per barrel. while outside US.

However.CRITICAL ANALYSIS were experienced by British Petroleum. 32 . the drilling capacities should be considered to make a fair comparison.