A Two-Headed Giant Dilemma

With worldwide demand for oil skyrocketing, however, some critics say Exxon should be spending that cash ferreting out new oil sources. Last year, overall capital spending was down 4.1 percent, to $14.9 billion. That means it is spending less on exploration for new prospects at the same time its older fields, like those in North America, are in a natural decline. The company’s production eroded nearly 5 percent in the first quarter, a rate that surprised analysts and caused Exxon to miss earnings projections.

All oil companies are grappling with moribund field production, as well as with the political reality that many countries with large untapped oil and natural gas reserves are closed to foreign capital. While other companies are working to address these issues, however, Exxon exudes a Zen-like calm. It was notably absent among this year’s winners in Libya’s first round of oil exploration licensing since U.S. sanctions were eased; smaller rivals Occidental Petroleum and Amerada Hess prevailed. “There’s not a country in the world that we just have to have a presence in,” company President Rex Tillerson told analysts in March.
U.S. News & World Report