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Page added on July 30, 2006

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Where will big oil’s big profits go?

Exxon Mobil says some windfall will go to more drilling.

After a particularly heady gush of oil- company profits, everyone from industry executives to international energy policymakers seems to be asking the same question: What should be done with all that cash?

The scale of the windfall is stunning: Exxon Mobil reported Thursday $10.36 billion in quarterly profits for the three months ending June 30. The results beat Wall Street expectations and marked, according to the Associated Press, the second-highest quarterly profit in history. The highest ever? Exxon’s $10.71 billion in the fourth quarter of 2005.

It’s an industrywide earnings bonanza built on the very thing – rising oil prices – that have been a source of growing consumer anxiety during a summer of $3-a-gallon gasoline.

“They’re just benefiting from a strong commodity cycle and doing a very good job of it,” says Lysle Brinker, an analyst with energy research firm John S. Herold. “But they don’t operate in a vacuum and they realize that. They’re going to get tons of spears and blow darts from political and consumer groups.”

Christian Science Monitor

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