The same individuals who constitute the management committee also form the compensation and executive development committee. This committee deals with issues relating to human resources and the organization whereas the management committee deals with financial issues.
+ Corporate Management
Officers
Departments
The work of the two corporate committees is supported by various officers of the corporation and their departments.
+ Corporate Officers
Chief Executive Officer
President
Senior Vice Presidents
Vice Presidents
The vice presidents function either as heads of corporate departments and offices or as heads of principal corporate divisions. These individuals and their positions are identified in your material.
+ Headquarters Departments
Treasurer’s
Controller’s
Tax
Law
Corporate Planning
Public Affairs
Environment and Safety
Human Resources
Investor Relations and Office of the Secretary
Medicine and Occupational Health
These departments, each headed by a corporate vice president, support the two corporate committees in broad areas pertaining to the entire organization. All are located at corporate headquarters except for Medicine and Occupational Health, which is located in Florham Park, New Jersey. Exxon maintains an office in Washington, D.C., headed by a vice president.
+ Headquarters Location
Where is Irving, Texas?
Why Irving?
After many years in New York City, corporate headquarters was relocated to Irving, Texas, in 1990. Prior to the move, numerous locations were evaluated and the Dallas area was selected as offering the best combination of desirable factors. These included living costs, transportation, business infrastructure and climate, and the cost of doing business.
Construction started in December 1993 on a permanent headquarters office building in the Las Colinas complex in the city of Irving. The site is near Dallas/Fort Worth International airport and about ten miles from downtown Dallas. Temporary offices are located about a mile from the permanent site.
+ Operating Elements
Affiliates
Divisions
Extending from the board of directors, the management committee, and other corporate officers and departments, the worldwide operations of Exxon Corporation are carried out by various affiliates and divisions.
Within the guidelines of overall corporate strategy, the line managers of these organizations have the authority to conduct operations as required by their geographic areas or particular function.
+ Divisions of Exxon Corporation
Exxon Company, USA
Exxon Company, International
Exxon Exploration Company
Exxon Chemical Company
Exxon Coal and Minerals Company
Exxon Upstream Technical Computing Company
Exxon Computing Services Company
These are the principal divisions of Exxon Corporation, although a number of other organizations are also corporate divisions. The chief executive officers of the first five are also corporate vice presidents.
+ Affiliated Companies
Imperial Oil Limited
Exxon Production Research Company
Exxon Research and Engineering Company
Together with the above divisions these companies conduct the majority of Exxon’s operations.
III. DIVISIONS AND AFFILIATES
+ Exxon Company, U.S.A.
Headquartered in Houston, Texas, Exxon USA handles the corporation’s domestic oil and gas operations (except for exploration). There are now about 16, 100 employees.
+ Exxon Company, International
This organization has been assigned a variety of operations, working with 20 principal affiliates and more than 600 associated companies. Business is conducted in some 80 countries, in at least 20 languages, and more than 35 currencies. ECI currently employs approximately 34,200 people.
+ ECI Functions
Strategic Guidance and Stewardship
Management Development
Coordinate
Supply/Transportation
International Crude and Product Trading
From its headquarters in Florham Park, Now Jersey, Exxon Company, International conducts operations worldwide. For affiliates outside the U.S. and Canada, ECI advises on matters of policy, strategy, investment plans, technology, and management development. ECI does more than advise; the company also has stewardship of operating and financial results for affiliates outside North America. When a project involves more than one affiliate, ECI acts as coordinator.
Exxon’s national affiliates exhibit considerable variety in their character. Some are major petroleum businesses with a long history of their own. For example, affiliates in thirteen countries in the Far East, Europe, and the Caribbean have been associated with Exxon for 100 or more years. During 1993 and 1994, the affiliates in Malaysia, Singapore, Norway, Thailand, Switzerland, Hong Kong and Japan celebrated centennials.
Many Exxon operations use raw materials and products from other countries. ECI operates the complex international supply and transportation network responsible for meeting affiliates’ needs. In addition, ECI has direct operating responsibility for international crude and product trading.
+ Exxon Chemical Company
Exxon Chemical Company is composed of geographic and other divisions, plus product and industry groups. We’ll look at this organization in more detail in the section on Petrochemicals. Headquarters for the company was moved to Houston in 1991. Exxon Chemical employs approximately 15,950 people.
+ Exxon Coal and Minerals Company
From headquarters in Houston, Exxon Coal and Minerals Company handles all of the corporation’s coal and other mining operations except for Canada. Electric power generation in Hong Kong is also managed by this segment of the corporation. There are approximately 8,100 employees.
+ Exxon Upstream Technical Computing Company
Exxon Computing Services Company
In 1991, a new Exxon division was formed to consolidate operations of four Exxon upstream computer centers in the Houston area. Exxon Upstream Technical Computing Company (EUTEC) provides computer services to the corporation and its affiliates in the areas of exploration and production. There are about 280 employees.
Exxon Computing Services Company was formed in 1992 to provide cost-effective management for a major part of Exxon’s computing, networldng and telecommunications activities. Headquarters is in Houston, Texas. There are approximately 313 employees.
+ Exxon Exploration Company
This company was formed in 1992 to consolidate all of Exxon’s exploration activities worldwide, except for Canada. Headquarters is in Houston, Texas. EEC operates through four business units responsible for different geographic areas, and has about 1,600 employees.
+ Imperial Oil Limited
Imperial Oil Limited, a major Canadian company with headquarters in Toronto, is owned 69.6 percent by Exxon. This company is responsible for the corporation’s Canadian businesses, and now has approximately 8,250 employees.
+ Exxon Production Research Company
Exxon Production Research Company is an affiliated company responsible for exploration and production research, the “upstream” sector. Headquarters is located in Houston with approximately 1,000 employees.
+ Exxon Research and Engineering Company
This affiliated company handles downstream research in refining and marketing. Exxon Research
and Engineering Company also performs fundamental scientific research which may have applications upstream or downstream, and supplies engineering expertise for new plants, expansions, and other projects. ER&E conducts research in alternative fuels and chemicals. There are about 3,000 employees, with headquarters in Florham Park, New Jersey.
Together with the above divisions these companies conduct the majority of Exxon’s operations.
Research related to the company’s 100th anniversary in 1982 identified more than 4,000 entities which are presently, or have in the past, been part of Exxon.
IV. EXXON OPERATIONS – PETROLEUM
Exploration Land
Drilling
Production Transportation Refining/Gas Plants Marketing
Petrochemicals
These are the functional segments of the oil and natural gas business that we spent most of the time examining in the overview course. We’ll look at them in light of Exxon’s operations in each area.
+ Raw Materials – Hydrocarbons
First, let’s review some basic information from the overview course. The raw materials of the petroleum industry are hydrocarbons, natural substances composed of widely varying combinations of carbon and hydrogen atoms. They are formed below the earth’s surface, largely from organic material, over varying periods of time.
+ Source
Migration
Trap
Once formed, the hydrocarbons, either as liquids or gases, often migrate through the rock layers toward the earth’s surface. In some areas local conditions such as anticlines (folds in the rock layers) stop the n-migration and trap the hydrocarbons underground. In other areas migration continues until the crude oil and natural gas reach the surface.
+ The Early “Oil Business”
The human race has been using hydrocarbons for thousands of years, for a variety of purposes – lubrication, medicines, waterproofing, and many others. Until relatively recent times, supplies were largely obtained from surface oil seeps and natural gas vents, which were most probably found by accident.
EXPLORATION
Eventually attempts began to increase supplies by locating new sources of oil. Although some of the early methods are no longer in use, the objective remains the same: to discover significant quantities of economically producible hydrocarbons trapped below the earth’s surface, in order to maintain reserves for future production.
The work of modem exploration can be divided into two phases, data acquisition and data interpretation.
+ Data Acquisition
Surface Studies
Geophysical Surveys
Exploratory Drilling
These are the principal methods used today for acquiring information about areas of interest. Surface studies include examination of rocks exposed at the surface, geochemical sampling, satellite photos and other techniques. Geophysical methods include gravity, magnetic and seismic surveys. Exploratory drilling provides information from well logs, cores and production or drill stem tests.
+ Data Interpretation
Processing
Analysis
Conclusions
Data acquired from field studies and surveys is processed, often using sophisticated computers. The data are analyzed and integrated with previously acquired information of all types, including preparation or revision of various types of maps and cross sections. The work of interpretation also is frequently conducted by using complex computer systems. A summary report is usually prepared with conclusions and recommendations.
+ Jersey Standard
In its early decades Standard Oil was focused on production and downstream operations. For Jersey Standard, interest in exploration was stimulated after the court ordered breakup in 1911, since Jersey was left mostly with downstream segments and needed crude for its refineries. World War I limited the areas and the effort, but after the war Jersey’s exploration program became worldwide.
+ Exxon Exploration Organizations
Exxon Exploration
Imperial
Exxon Production Research
Today Exxon Corporation’s worldwide exploration for oil and gas takes place in twenty-eight countries on six continents plus offshore areas. The work is divided geographically between two organi-zations. Exxon Exploration Company is responsible for Exxon’s exploration work in all areas of the world except Canada which is handled by Imperial. This division of the corporation consolidates exploration operations formerly assigned to Exxon USA and ECI.
Exxon Production Research conducts the research projects needed to support and enhance the efforts of the other two companies. We’ll talk about Exxon’s exploration methods when we discuss EPR.
+ Exxon Exploration Company
In discussing Exxon’s exploration activities we’ll use geographic regions, starting with the United States. Let’s begin with Exxon USA’s predecessor, Humble Oil.
+ Humble Oil & Refining Company
Wallace E. Pratt
In 1918, Humble hired Wallace E. Pratt as the company’s first professional geologist. The following year Jersey Standard acquired 50% of Humble, including the services of Mr. Pratt. Later events proved his services to be one of the most signifi