Oil companies pour on charm before posting fat profits
Ads tout their people-friendly efforts. But spending data show the focus remains the bottom line.
African children smile for the camera, a youngster sips pink medicine from a spoon and a doctor explains his part in a venture to fight malaria, the No. 1 killer on the continent. It's an effort, he says, that will help save hundreds of thousands of lives.
The images look like something out of a health documentary, but it's a commercial for oil giant Exxon Mobil Corp., for which the doctor is medical projects director.
Exxon's other new ads talk about efforts such as its breakthrough technology for hybrid-electric car batteries. Chevron Corp. is showcasing its geothermal operations. Of the energy challenge, one ad says, "This isn't just about oil companies. This is about you and me."
The world's best-known oil companies are pouring on the charm as they get ready this week to parade another round of fat profits before a public that is feeling suddenly poorer. The spotlight will shine on Exxon on Thursday and Chevron on Friday. Such advertising makes sense after a summer with oil at nearly $150 a barrel and a fall likely to bring renewed scrutiny of their investments and tax breaks.
But when oil companies spend their money, it's less about you and me than about their shareholders. In many respects, industry experts note, what's good for Big Oil's bottom line isn't necessarily good for Joe Q. Jetta.
"That's a game that oil companies have been playing for a while, but they've been pumping more money into it lately," said Sheldon Rampton, research director at the Center for Media and Democracy. "They're hoping to mitigate their bad reputation rather than become beloved."
A few examples in which shareholders have trumped consumers:
* With world oil production falling behind demand, major oil firms are spending a larger share of their record profits on stock buybacks and dividends rather than increasing supply-boosting exploration.
* In July, when refiners saw profits squeezed by high oil prices and lower fuel demand, they throttled back production. When hurricanes hit the Gulf Coast, as much as 14% of the nation's refining capacity was off-line and gasoline inventories were unusually low. Drivers quickly felt the effects.
* As high diesel prices help put truckers on the road to bankruptcy, refiners have been sending diesel to Europe to fetch a better price.
In nearly every industry, shareholder returns regularly win out over the needs of consumers -- who may also be shareholders. Energy companies are unusual, though, because the planet hasn't yet figured out how to get by without their products.
