Exxon and Mobil CEOs Negotiate Merger Amidst Low Oil Prices

As low oil prices decimate profits, Lee Raymond, chief executive of Exxon Corp, and Lucio Noto, his Mobil Corp counterpart, are weighing a buyout that would create the world's largest oil company. Cutting expenses has been a key strategy for both men, with 30,000 jobs slashed between them since 1993 and billions invested in cost-saving technology. The merger could cost Exxon more than $US70 billion, with one CEO potentially losing their position.

Key Takeaways:

• The proposed merger between Exxon and Mobil could create the world's largest oil company, with a market value of $US180 billion, almost three times that of Mobil.
• Lee Raymond, Exxon's CEO, has been pivotal in driving cost-cutting measures, resulting in smaller earnings drops compared to competitors like Mobil and Royal Dutch/Shell.
• Raymond's leadership style emphasizes results over personality, with him often giving solo performances at analyst meetings and prioritizing numbers over other factors.
• The merger would further consolidate the oil industry, potentially resulting in a loss of jobs and increased concentration of power.
• Both Raymond and Noto have been known to torpedo merger negotiations that require them to give up power, highlighting their desire to maintain control.
• Analysts consider Raymond and Noto to be among the best managers in the industry, with Raymond's performance-driven approach being a key factor in Exxon's success.

Statistics:

• Over 30,000 jobs have been cut between Exxon and Mobil since 1993.
• Exxon has invested billions of dollars in cost-saving technology.
• Exxon's market value is $US180 billion, almost three times that of Mobil.
• Exxon reported $US8.5 billion in earnings in 1997, beating General Electric's $US8.2 billion.
• Oil prices have fallen 40% to a recent price of $US11.86 a barrel, from $US19.83 a year ago.

Sources:

• BLOOMBERG
• BT Alex Brown
• Fahnestock & Company
• New York Mercantile Exchange