President-elect Donald Trump has chosen Exxon CEO Rex Tillerson to be the next US secretary of state. Tillerson worked his way up the ranks to become CEO, and that’s impressive by any standard. However, Rex will leave Exxon worse off than when he found it. The big worry about Tillerson is that he may put Exxon profits above the interests of the vast majority of the citizens of the United States.
Big oil has long conspired to keep gasoline prices higher than they would otherwise be in the face of actual competition. However, oil prices have plunged during the last few years because of Iran’s return to the oil markets.
According to Bloomberg, “When Tillerson took over, Exxon had $28.7 billion in cash and was pumping almost 4.3 million barrels of crude daily. Today, Exxon’s output is down to 4 million barrels a day, and its cash reserves have declined 85 percent, to $4.3 billion, eroded by soaring project costs and collapsing energy prices. “The world has changed dramatically since Rex Tillerson took over,” says Brian Youngberg, an analyst at Edward Jones, a brokerage and advisory firm. “’The fact that he’s leaving his successor a company that produces less than it did 10 years ago says a lot.’”
Tillerson big decisions that turned out to be busts. Tillerson negotiated the $35 billion acquisition of XTO Energy, a Texas shale gas driller. By 2012 natural gas prices had crashed and have remained historically cheap. In 2011, Tillerson entered a joint venture to drill in the Russian Arctic alongside Kremlin-controlled Rosneft. The deal soured after Vladimir Putin’s Ukrainian intervention triggered international sanctions against Russia, forcing Exxon to abandon the project and the $1 billion it had already spent.
Still, compared with rival oil companies, Exxon has managed the downturn in oil prices fairly well, avoiding mass layoffs and maintaining its AAA credit rating. So Tillerson has not been a complete bust as CEO.
As Secretary of State Tillerson has met world leaders. He’s supposedly cozy with Vladimir Putin. So he’s not devoid of experience among world leaders. In other words, Tillerson is not the equivalent of Betsy DeVos as Secretary of Education, a person with zero experience in public education, and a person who is likely completely unfit for the job.
Check out Bloomberg’s story below.