In late 2011, ExxonMobil announced plans to drill for oil in disputed land between Kurdistan and the rest of Iraq. Baghdad’s government, fearing the move could break up the country, threatened to eject the company from a big project near Basra, in the south of the country. Exxon ignored them, knowing the encounter was a mismatch. Iraq’s revenue from oil sales that year amounted to about $8obn. Exxon’s revenue came in at more than $43obn. The move exemplified the geopolitical chutzpah of America’s best-known energy producer – the kind of clout that persuaded Donald Trump to make Rex Tillerson, Exxon’s then chief executive, his first secretary of state.
Almost a decade later, Exxon’s Kurdish investment has gone nowhere and its big project in southern Iraq is producing a fraction of its original target. Far from showing Exxon’s international mastery, these days Iraq is just another oil arena where things did not go as the company had planned. “Exxon was a superpower in every sense of the word – a blue-chip stock that handed out money year after year, a firm with a calling card to foreign leaders that rivalled even top international diplomats, and with geopolitical savvy that bested most intelligence agencies,” says Amy Myers Jaffe, professor at The Fletcher School at Tufts University. “It was one of the safest bets on Wall Street.
“But no more does it have this status,” she adds.
ven before coronavirus shattered the global oil industry Exxon – once the world’s most valuable by market capitalisation – was struggling. But the pandemic has left the company exposed. In March, rating agencies downgraded it; in August it lost its place in the Dow Jones Industrial Average to a software company. And once famous for high margins and low leverage, Exxon is now mired in debt and expected to report its third consecutive quarterly loss on Friday.