Magazine

Lee Raymond: Exit Interview


By Maria Bartiromo When Exxon Mobil (XOM) on Jan. 30 reported the most mind-blowing gains ever racked up by a public company in a single year, howls of outrage were heard in Washington, and the pundits pounced. But it was just Lee Raymond's way of saying so long, and thanks for the memories. Just a month earlier, Raymond, the architect of ExxonMobil's spectacular showing, retired from his post as CEO. I caught up with Lee twice over the course of the past month or so, and this interview is distilled from those talks.

ExxonMobil reported a record fourth quarter: $10.7 billion in earnings, $36 billion for the year. Don't numbers like that raise the pressure for a windfall-profits tax?

I would hope not. The realization is dawning on people that a huge investment is needed for the oil demands of this country and the world, and you need a huge income stream to [make those investments]. What a lot of Americans don't understand is 75% of our profits don't even come from this country.

Still, do you worry about higher taxes?

Sure, we still worry. Frankly, all of American business should worry about that, because if Washington gets in the mode that they decide some company's profitability should be controlled...or whether it's too high or low, then they are not just going to single out industries, but companies within industries. The next thing you might see is that they think CNBC or BusinessWeek is making too much money.

Can we wean ourselves off Mideast oil, as President Bush suggested we should in the State of the Union Address?

Energy is the lifeblood of the world economy, and oil and gas are the dominant energy forms. That is not going to change anytime soon. We might be able to reduce our dependence to a modest degree, but in reality, so long as the economy continues to grow, we will have to import substantial oil and import much more natural gas than we do right now. Most developed countries in the world find themselves in that position. And the Middle East is where the reserves are.

Should that concern us given our relationship to the Mideast? Many people are worried about Iran.

Sure, it should concern people, and that is the point a number of us have been making for a long time.

Do you think we went to war over oil?

No, not in that sense. It's always difficult to synthesize why we went into Iraq, but I do think there was concern people had regarding the stability in the region.

Are we going to have to send troops to protect oil fields around the world? And as China and India continue to grow and need more oil, what happens to us?

The major economies in the world are competing for the world's pool of energy supplies. We really don't have any special rights, but we have to recognize we are in the pool. We are not isolated and cannot isolate ourselves. History suggests that supplies will begin to grow faster than they have been. The IEA [International Energy Agency] has said that by the end of the decade there will be significant capacity again. People don't understand the time dimension in our industry: Things don't happen overnight.

So prices should go down?

Yes, that would mean lower prices. I have had that view for the last couple of years...that the current price level cannot be supported.

Should China be allowed to acquire a U.S. oil company?

I think there was much ado about nothing with regard to the Unocal (CVX)-CNOOC (CEO) deal. Unocal was really not a big part of this industry.

So China should be able to buy ExxonMobil?

[Laughs] Well, Maria...they are going to have a hard time getting my shares.

Maria Bartiromo is the host of CNBC's Closing Bell


Too Cool for Crisis Management
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus