United for Peace of Pierce County, WA - We nonviolently oppose the reliance on unilateral military actions rather than cooperative diplomacy.

The Financial Times of London reported Saturday that although Exxon Mobil's 1st-quarter profit of $10.9bn (about $119m a day) was "the second-biggest quarterly profit in U.S. history," it "disappointed on Thursday with lower production and weaker profits in its refining business than expected" and caused a single-day drop in the share price of almost 4%.[1] -- But "[t]he most worrying feature of Exxon's statement was its decline in oil and gas production: a drop of 5.6 per cent compared with the first quarter of 2007," Ed Crooks and Sheila McNulty said. -- And Exxon's "famed unwillingness to compromise under pressure from resource-rich countries" like Venezuela and Russia may be an indication of the company's rigidity: "European oil companies such as Total of France and Eni of Italy have stressed the need to recognize that the world has changed," said Crooks and McNulty. -- "[Total and Eni] say international oil companies are no longer in the driving seat, and need to approach resource-rich countries differently if they are to gain access to their reserves." -- A separate article in the Financial Times on Thursday noted that Exxon is now sitting on $40.6bn pile of cash.[2] -- In an interesting tangential development, on Wednesday a group of Rockefellers, descendants of John D. Rockefeller, the founder of the parent company, Standard Oil, "blasted the world’s biggest listed oil company for failing to recognize the need to move away from oil and gas into alternative fuels."[3] -- "Lex" said that " 64 out of 78 descendents of John D. aged 21 or over" were involved in the challenge to Exxon's leadership.[4] -- Bloomberg News, which put the number at 66 rather than 64, noted that "Exxon Mobil surpassed PetroChina Co. last month to become the world's biggest corporation by market value."[5] -- Exxon "pumps more oil than every member of the Organization of Petroleum Exporting Countries except Saudi Arabia and Iran." -- Daniel Gross of Newsweek examined the Rockefeller Revolt with something of a novelist's eye, and speculated in a column about its supposed deeper significance: "I left with the sense that in the Rockefellers' eyes, Exxon Mobil's management is as much guilty of poor manners as it is of poor corporate governance. When Rex Tillerson was tapped as the new CEO, about two thirds of the adult Rockefeller family members wrote him a letter, which welcomed him and asked for a meeting with him and the board. "He was not responsive to that," Neva Rockefeller Goodwin said."[6] -- Such trivial personalizing of issues is typical of American corporate media. -- The London Independent took a different approach, emphasizing the environmental concerns of the 66 Rockefeller descendants: "They are backing resolutions at the Exxon's shareholder meeting next month which call on the company to fund research into how climate change will affect developing nations. They believe a push into alternative fuels by Exxon and other major oil companies could improve the situation, and demand a new policy on funding alternative fuels. -- They also want the company to set public goals for reducing carbon emissions from their output — targets which, if tough enough, would force the company to offer less-polluting products than oil and gas."[7] ...

EXXON MUST ACT TO KEEP AN ENVIABLE REPUTATION
By Ed Crooks and Sheila McNulty

Ask anyone in the oil business which company they admire the most, and 99 times out of 100 you will get the same answer: ExxonMobil. The technical excellence of its staff and the rigor of its corporate culture are respected, envied, and sometimes feared by competitors.

That discipline -- a word often used in connection with Exxon, including by the company itself -- has paid off handsomely for investors. Whether viewed over the past five years or past 20, Exxon's total shareholder returns have comfortably exceeded the average of its peers: Royal Dutch Shell, BP, and Chevron.

But nobody is perfect, and this week's first-quarter results from Exxon, in spite of being the second-biggest quarterly profit in U.S. history, proved the point. After rivals Shell and BP had reported earnings well ahead of expectations, and been rewarded with jumps in their share prices, Exxon disappointed on Thursday with lower production and weaker profits in its refining business than expected. Its shares fell almost 4 per cent on the day.

In a week when descendents of John D. Rockefeller, the founder of Exxon's ancestor Standard Oil, attacked the management for failing to secure the company's future, it was an embarrassing slip-up.

The question is whether those results were just a one-off, or a warning that Exxon's growth prospects may not be as bright as the markets had hoped.

As analysts at Credit Suisse put it: "Are we in danger of over-reacting? Probably. One quarter doesn't make a trend, and ExxonMobil remains a formidable operator. Still, part of the superior operating rationale for [its] valuation premium to other Big Oils took a knock today."

Exxon's shares trade at about 10.5 times this year's expected earnings, compared with 8.8 times for Shell and 9.4 times for BP. The most worrying feature of Exxon's statement was its decline in oil and gas production: a drop of 5.6 per cent compared with the first quarter of 2007.

Exxon's withdrawal from Venezuela, where it chose to pull out of a heavy oil project rather than accept the new contract terms imposed by the government of Hugo Chavez, played its part in depressing output. The falling output also reflected the effect of production-sharing contracts that oil companies use in many countries, which give a greater proportion of output to the national government as oil prices rise. But even taking those factors into account, output volumes fell by 3 per cent.

Exxon argues that energy is a long-term business, and it would be ridiculous to judge it on a single quarter. Presenting its strategy in March, Exxon showed a projection that oil output would be roughly flat until 2012, but gas output would grow.

Mark Albers, the vice-president of exploration and production, warned analysts then that output "might well take a less smooth path" than the graph suggested. However, investors will still be troubled by the fear that, as Robin West of PFC Energy said, "Exxon does a lot of things superbly well. But does it have the potential that will permit it to grow?"

One potential problem is Exxon's famed unwillingness to compromise under pressure from resource-rich countries, as seen in its tough line with Venezuela.

Russia is another example, where Exxon has been holding out for the rights in its contract to sell the gas from its Sakhalin 1 project wherever it chooses. Gazprom, the state-controlled gas company, wants the gas for itself.

European oil companies such as Total of France and Eni of Italy have stressed the need to recognize that the world has changed. They say international oil companies (IOCs) are no longer in the driving seat, and need to approach resource-rich countries differently if they are to gain access to their reserves.

Paolo Scaroni, Eni's chief executive, spoke last month about the need for a "cultural shift" by the IOCs. That has been reflected in Eni's willingness to invest more in Venezuela, in spite of the tactics of Mr. Chavez.

Christophe de Margerie, Total's chief executive, says companies need to focus on their "acceptability" in the countries where they operate.

For Rex Tillerson, Exxon's chairman and chief executive, the best way for the companies to make themselves acceptable is to maximize the value of the country's resources, which means delivering projects on time and on budget. In that, Exxon has a spectacular record. Since 2003, during a period of rampant cost inflation in the sector, it has on average completed its investment projects only fractionally over budget and with minimal delays. Its costs per barrel of oil produced have risen more slowly than for any of its main competitors.

Exxon's investment plans, however, suggest either a reluctance or an inability to back that judgment with cash. It used only about 26 per cent of its cash flow on capital and exploration spending last year: less than half the rate for Shell, BP, and Chevron. Instead, the money has gone into massive share buy-backs. At the present rate, Exxon would have bought back all its equity in 15 years. If the company is to maintain its outstanding reputation, it will need to prove it can do more than shrink elegantly in the decade to come.

EXXON OIL PRODUCTION STRUGGLES FOR GROWTH
By Sheila McNulty (Houston) and Carola Hoyos (London)

ExxonMobil, long regarded by its peers and investors as the most successful interational oil company, is beginning to show signs of weakness, revealing on Thursday that it is struggling to increase oil production and to squeeze profit out of its refining business.

The world’s biggest energy group announced a first-quarter record profit of $10.9bn but its oil production fell almost 10 per cent in the first three months of the year and refining profits slumped.

While the broader market rallied, Exxon shares fell 3.6 per cent to $89.70 as analysts warned that the company might fail to grow at all in the next five years.

Neil McMahon, an analyst at Sanford Bernstein, said: “Over the next five years their slow production growth guidance may not come to pass at these high oil prices given production sharing agreements.”

The disappointment was deepened by the fact that BP and Royal Dutch Shell, Exxon’s closest rivals, had kept production flat or growing and had beaten expectations.

Exxon’s overall oil and gas production fell 5.6 per cent from the year-earlier quarter. Production in Africa, a key new area of investment, fell 20 per cent as high oil prices and contract stipulations forced it to hand over more of its production to host country governments. Venezuela’s nationalization of its oil fields also hurt the group’s volumes, as did declines at Canadian gas fields.

Unlike Royal Dutch Shell, which is stressing its research in second generation biofuels, and is a leader in making natural gas into transport fuels, Exxon has long argued that traditional alternatives, such as wind power, have proved uneconomic. But it says it is researching future fuels that it is less ready to talk about publicly.

The figures are likely to increase pressure from investors for Exxon to raise dividends. It devoted $8bn to buying back its own shares and $1.9bn to dividends while adding another $6.9bn to its now $40.9bn cash pile.

“They need to seriously consider a change of plan,” Mr McMahon said. “They don’t appear to be growing in volume terms and given the quality of their balance sheet, they need to give money back to their investors through a higher dividend.”

The $8bn in share buybacks dwarfed the company’s $5.5bn spending on capital and exploration, prompting criticism by Edward Markey, chairman of the U.S. House select committee on energy independence, who said: “At the rate of current stock buybacks, Exxon will have no privately held stock within 15 years."

Hillary Clinton, the Democratic presidential contender, also responded to the earnings report, saying there was “something seriously wrong with our economy when Exxon’s record $11bn in quarterly profits are seen as a disappointment by Wall Street.”

Exxon earned $2.03 a share, up 25 per cent from last year, but less than the $2.14 expected by analysts. Its net income of $10.9bn was up 17 per cent from last year.

HOUSTON -- The Rockefeller family, the longest continuous shareholder in ExxonMobil, on Wednesday blasted the world’s biggest listed oil company for failing to recognize the need to move away from oil and gas into alternative fuels.

“We are trying to keep a giant from falling,” said Neva Rockefeller Goodwin, economist and great-granddaughter of John D. Rockefeller, the company’s founder. “ExxonMobil needs to reconnect with the forward-looking and entrepreneurial vision of my great-grandfather.”

“As he noted, ‘If you want to succeed, you should strike out on new paths, rather than travel the worn paths of accepted success,’” she said. “ExxonMobil is profiting in the short term from investments and decisions made many years ago, and by focusing on a narrow path that ignores the rapidly shifting energy landscape around the world, including developing nations.”

The Rockefeller family is abandoning its traditional behind-the-scenes role at Exxon as private energy companies of all stripes seek to find new ways to compete with state oil companies that now control more than 80 per cent of the world’s reserves.

The family said Exxon appeared haunted by previous ill-fated forays into nuclear and solar power and should be making greater investments in alternative fuels.

Competitors such as ConocoPhillips have called for new business models and have sought to find new, environmentally-friendly raw materials -- even including chicken fat -- that can be made into fuel.

Peter O’Neill, head of the family committee dealing with ExxonMobil and great-great-grandson of John D. Rockefeller, said Exxon researchers told him in September that they had identified two promising alternative energy sources, but had not made any investments in them.

Alan Jeffers, Exxon spokesman, told the *Financial Times* that oil and gas would provide up to 80 per cent of the world’s energy needs over the next 30 years and that “to abandon that would not be wise.”

Exxon began as part of John D. Rockefeller’s Standard Oil, but the family has not had a representative on the board since 1911.

However, its name still resonates with investors and it could help build support at the May 28 annual meeting for shareholder resolutions calling for an independent chairman to prod Exxon to “look beyond its short-term focus on oil and gas.”

Will there be blood? The progeny of John D. Rockefeller, founder of the colossus that was Standard Oil, are gunning for the management of the most colossal of Standard’s successor companies, ExxonMobil. The family -- or, at least, 64 out of 78 descendents of John D. aged 21 or over -- want change. Exxon is accused of not listening properly to shareholders. It is being pressed, again, to split the roles of chief executive and chairman. Citing Exxon’s insular culture, the family perceives inadequate preparation for a world that must become less reliant on oil.

The call for an independent chairman is laudable. Forcing Exxon to do more in addressing climate change is a more questionable aim. The reality is that oil and gas will remain important to the world’s energy mix for years to come, even as alternatives are developed. In a supply-constrained world, it is hard to knock Exxon for doing what it does: providing energy very efficiently. Shareholders profit handsomely from Exxon’s discipline. As Deutsche Bank points out, Exxon makes a better return on investment in its weakest division, chemicals, than its peers make on the traditionally highest returning upstream business.

Culturally, mature oil companies are not natural homes for alternative energy businesses. Exxon, with its low cost of capital and global reach, might be more suited to acquiring breakthrough technologies developed elsewhere. The corollary of such a strategy, however, is that Exxon’s own culture must be flexible enough to nurture such additions. A better reputation for openness would help in this regard – as well as address a potentially bigger challenge than that posed by the descendents of John D. This is, after all, a US election year in which the oil price, and associated profits, loom very large.

NEW YORK -- Descendants of John D. Rockefeller want the company he founded, Exxon Mobil Corp., to spend more money on alternatives to crude oil and cut greenhouse gas emissions from its refineries and fuels.

Rockefeller family members, including Neva Rockefeller Goodwin, a great-granddaughter of the founder, and Peter O'Neill, head of the Rockefeller family committee dealing with Exxon Mobil issues, also want the company to bar the chief executive officer from serving as chairman so management can't delay action on climate change.

Rockefeller Goodwin, an economist, said: "Exxon Mobil is profiting in the short term from investments and decisions made many years ago, and by focusing on a narrow path that ignores the rapidly shifting energy landscape around the world, including developing nations."

In addition, the Rockefellers warned that reliance on hydrocarbons will produce an "unrelenting" increase in global carbon-dioxide emissions blamed for global warming, with "devastating consequences, especially for those who are poor in resources and influence, whether they live in developed or developing countries."

About 85 per cent of Rockefeller descendants over the age of 21 agreed to support four resolutions Exxon Mobil shareholders will vote on at the Irving, Texas-based company's May 28 annual meeting, O'Neill said today during a conference call with reporters.

Exxon Mobil isn't doing enough to prepare for climate change and its implications for fossil-fuels demand, he said.

"This is an urgent and profound issue," Stephen Heintz, president of the Rockefeller Brothers Fund, said on the call. "It's time for Exxon Mobil to become a leader in this field."

The resolutions call on Exxon Mobil, the world's largest gasoline producer, to invest more in alternative fuels, cut greenhouse gas emissions at its plants and from the fuels it makes, prepare a study of the consequences of global warming on developing nations, and split the board chairman and CEO positions.

Goodwin said she didn't know how much Exxon Mobil stock the family controls. John D. Rockefeller died in 1937.

"There's an awful lot of people who are getting increasingly annoyed at Exxon Mobil," Goodwin said. "This kind of public pressure we hope will continue to build, and we will be involved in trying to help build it."

Exxon Mobil surpassed PetroChina Co. last month to become the world's biggest corporation by market value. Exxon Mobil, which began as a maker of kerosene to replace whale-oil as household lamp fuel, was formed by Exxon Corp.'s $85.2-billion acquisition of Mobil Corp. in 1999, which combined two entities born in the court-ordered 1911 dissolution of John D. Rockefeller's Standard Oil Trust.

Exxon Mobil is the world's largest company by market value and pumps more oil than every member of the Organization of Petroleum Exporting Countries except Saudi Arabia and Iran.

Alan Jeffers, a spokesman for Exxon Mobil, didn't immediately return telephone calls seeking company responses to the Rockefeller family's action.

O'Neill, a great-greatgrandson of John D. Rockefeller, lauded the company's invention of battery components that may make hybrid gasoline-electric cars cheaper, lighter, and safer, announced in November. He urged Exxon Mobil to pursue more such initiatives.

"If the next 20 years were going to be about oil and gas, we wouldn't be holding this press conference," O'Neill said.

The Rockefellers decided to take their concerns public after five years of what they said were fruitless efforts to contact Exxon Mobil's board, Goodwin said.

"We had hopes we wouldn't need to go public with it and we could effectively talk to the company in private," Goodwin said.

There are 232 Rockefeller family members, 152 of them descendants of the 19th-century oil magnate, O'Neill said. Sixty-six of the 78 descendants over the age of 21 have agreed to support the four resolutions, he said.

Goodwin said the family thinks CEO Rex Tillerson, who presided over two years of record profits, is doing a good job. The company's insular corporate culture hinders innovation, she said.

"The senior management have all basically spent their lives at Exxon Mobil," Goodwin said. "But there's a lack of interest in listening to outsiders and an assumption that they know all the answers."

The proposal to split the chairman and CEO positions, submitted by activist investor Robert Monk, was supported last year by 40 per cent of shareholders, up from 34.3 per cent in 2006. Exxon Mobil opposes the proposal, one of 17 shareholder resolutions up for consideration at the annual meeting to be held in Dallas, Tex. Since Tillerson assumed both jobs in 2006, Exxon Mobil rose 57 per cent, compared with a 12-per-cent increase for the Hague-based Royal Dutch Shell Plc and a four-per-cent decline for BP Plc of London.

Yesterday morning, an unusual breakfast press conference was staged in midtown Manhattan.

The place: the Estrela room on the penthouse level of the Parker-Meridien hotel.

The speakers: Neva Rockefeller Goodwin and Peter O'Neill, members of the Rockefeller family who are pushing for changes in corporate governance at Exxon Mobil, the descendant of the Standard Oil company created by John D. Rockefeller.

No family in American history has possessed more wealth, or been more conflicted about the obligations and benefits it bestows, than the Rockefellers, who are now enjoying their sixth generation of good fortune. And the mixture of modesty, politesse, and concern for the world that has characterized the Rockefeller brand for more than a century was on full display.

The Rockefeller family members were far less slick and comfortable at the podium than the executive (Stephen Heintz, president of the Rockefeller Brothers Fund) and the politician (Connecticut Treasurer Denise Nappier) who accompanied them. Neva Rockefeller Goodwin, a daughter of David Rockefeller, and hence great-granddaughter of John D. Rockefeller, is a Tufts University economist who elides the Rockefeller out of her professional name. She sported a blue sweater, glasses, and an unfussy mane of graying hair. Peter O'Neill, a great-great grandson of the original, had a pen protruding from his shirt pocket. These are people who were bred not to raise their voices too forcefully in public or to brandish the family name as a weapon. Their modest delivery makes self-important pronouncements seem non-threatening. Sample line: "As the oldest continuous shareholders of the Exxon Mobil corporation, we almost define the long-term investors," said Neva Rockefeller Goodwin. "My great-grandfather revolutionized the oil industry over a century ago."

The Rockefellers made a point of repeatedly complimenting the hired help on jobs well done. "It's not about [Exxon Mobil CEO] Rex Tillerson," said Peter O'Neill. "He's an amazing oil and gas manager." Management, he continued, is "very good about planning these big projects and implementing them, and they should be applauded for it." But while the Rockefellers very much appreciate the $40 billion in profits ExxonMobil earned last year, the family notes that there are "serious disjunctions that we perceive between Exxon's short-term actions and the long-term health of both this company and the economy."

The 66 adult descendants of John D. Rockefeller (84 percent of the total) who signed on to this initiative are worried: Competitors have been more aggressive on renewables and alternative energy; Having the same person hold the job of chief executive officer and chairman of the board contributes to an insular culture and a lack of critical and imaginative thinking; The company isn't thinking outside the barrel to deal with climate change or prepare for regulatory changes. And so they have reluctantly decided to call publicly for shareholder votes on a resolution to separate the posts of chairman and chief executive officer, and on a resolution to have Exxon Mobil convene a task force to examine the company's assumptions about growth markets, and the consequences of global climate change on poor economies.

The scions of a fortune created in the 19th century want the company to embrace the 21st century. They'd like Exxon Mobil to be an agent of change, not an obstacle to it. In boosting investments in renewables and focusing on climate change, Exxon Mobil wouldn't be succumbing to the sort of mushy, feel-good impulses that emanate from the Rockefeller Foundation, Goodwin and O'Neill argued. Rather, it would be going back to the future. The company needs to "reconnect with the forward-looking and entrepreneurial vision of my great-grandfather." After all, kerosene was the "alternative energy of its day."

Good points all, and well delivered. But the Rockefellers, of all families, should know that Exxon Mobil is unlike to have much success ushering in a new energy paradigm that will change the world for the better. Virtually all the good works conducted by John D. Rockefeller, and by his descendants, have been done by the non-profit foundations and philanthropic institutions he created, not by the efficiency-seeking, for-profit machine he built. What's more, a company that depends on an established technology rarely has the incentives or ability to lead a shift to the technology that will upend the old way. The oil industry was created by a dry goods merchant in Cleveland, not by whale oil harvesters in New England.

In his engaging memoir, David Rockefeller notes that modesty and a relentless focus on behaving appropriately were significant at times, overwhelming parts of the Rockefeller inheritance. And those were on full display here. When asked how many shares of Exxon Mobil the family held, Neva Rockefeller Goodwin said she had no idea. And I left with the sense that in the Rockefellers' eyes, Exxon Mobil's management is as much guilty of poor manners as it is of poor corporate governance. When Rex Tillerson was tapped as the new CEO, about two thirds of the adult Rockefeller family members wrote him a letter, which welcomed him and asked for a meeting with him and the board. "He was not responsive to that," Neva Rockefeller Goodwin said. At another point, David Rockefeller brought his daughter to lunch with Tillerson and outgoing CEO Lee Raymond. "But I was told I had to behave myself and not say much," she said. Since then, the board and Tillerson have brushed off family requests to engage on these issues. "The responses were written by representatives of management," rather than by Tillerson himself. Which leads me to think that Exxon Mobil, while it has genius engineers and mangers, must have some pretty thick-headed investor relations staffers. If you're going to kiss off the Rockefellers, don't have a lackey do it.

ROCKEFELLER'S DESCENDANTS TELL EXXON TO FACE THE REALITY OF CLIMATE CHANGE
By Stephen Foley

Descendants of John D. Rockefeller, America's first and biggest oil industry magnate, say that ExxonMobil, a company spawned from his 19th-century monopoly Standard Oil, faces becoming obsolete if it does not step up the search for alternative fuels.

Fifteen family members yesterday went public in an attempt to get Exxon to face up to the realities of climate change, and they promised to join a shareholder rebellion to shake up the board to alter company's strategy.

"Kerosene was the alternative energy of its day when he realized it could replace whale oil," said Neva Rockefeller Goodwin, great-granddaughter of the oil Standard Oil founder. "Part of John D Rockefeller's genius was in recognizing early the need and opportunity for a transition to a better, cheaper, and cleaner fuel."

And Ms. Goodwin, now an economist and environmentalist, added that Exxon was blinkered in its short-term pursuit of profits "from investments and decisions made many years ago, focusing on a narrow path that ignores the rapidly shifting energy landscape around the world, including developing nations."

The family's intervention came the day before Exxon reports what are expected to be profits of about $11bn (£5.5bn) for the first three months of the year. That figure, the equivalent of £1m every 25 minutes, could match Exxon's own record for the biggest quarterly profit in corporate history, thanks to record oil prices that yesterday stood at $114 per barrel.

Environmentalists have long pointed to Exxon as a villain of the climate change debate, since it denied a link between carbon emissions and global warming. Under its current chairman, Rex Tillerson, however, the company has softened its position, and focused on reducing the emissions from its operations.

The Rockefellers want the company to go much further, however. They are backing resolutions at the Exxon's shareholder meeting next month which call on the company to fund research into how climate change will affect developing nations. They believe a push into alternative fuels by Exxon and other major oil companies could improve the situation, and demand a new policy on funding alternative fuels.

They also want the company to set public goals for reducing carbon emissions from their output -- targets which, if tough enough, would force the company to offer less-polluting products than oil and gas.

They are also demanding that Mr. Tillerson split the roles of chairman and chief executive, a resolution which last year won 40 per cent of the vote.

"If the next 20 years of the energy business were just going to be about oil and gas, we probably wouldn't be here today," Peter O'Neill, head of the Rockefeller committee dealing with Exxon told reporters in New York. "Having an independent chairman leading an independent-thinking board of very experienced directors will substantially improve Exxon's ability to look the future squarely in the face."

John D. Rockefeller's Standard Oil grew to monopolize the industry and the U.S. courts broke it up into 34 separate companies 1911. Exxon and Mobil, which merged in 1999, were each descended from those new companies.