Exxon Mobil reaps record profits

The merger was born out of the tough times facing oil companies

Exxon Mobil, the world's biggest oil company, has announced record fourth-quarter profits of $5.12bn compared with $2.7bn the previous year.

The US oil giant attributes the huge growth in profits to soaring oil and gas prices.

And full-year profits climbed to $17bn, hitting a world record.

The $5.12bn profit excludes the cost of the merger - the industry's biggest last year.

Oil companies had claimed during the September fuel crisis that they made very little profit on petrol sales.

And Exxon Mobil - which sells petrol and diesel in the UK under the brand names Esso and Mobil - was one of several oil companies criticised for not lowering the price of its petrol.

But while struggling to make profits on petrol sold at the pump, the high international prices of crude oil mean that Exxon Mobil reaped massively higher amounts of money from its oil and gas production units.

In spite of the news, Exxon Mobil's share price ended the day marginally lower due to this year's downward movement in the crude oil price.

Texaco's profits double

And on the same day Texaco, the US' third largest oil company, announced a doubling in profits.

Texaco's fourth quarter profits reached $840m compared to $370m in the same three months a year ago.

Texaco is in the middle of a merger with its US rival Chevron, which it hopes will give it greater leverage to compete with oil giants such as Exxon Mobil.

All the oil companies, including European majors such as BP and Shell, are expected to see soaring profits because of the sharply higher price of crude oil.