Exxon Mobil launched a new organization structure built on aconcept of eleven separate global businesses designed to allow thecompany to compete more effectively in a changing worldwide energyindustry. Lee Raymond, CEO, said by mid-December the company willannounce a revised forecast of merger benefits that will likelyexceed the $2.8 billion annual level announced last year.

Regarding the synergy benefits the companies announced inDecember 1998 Raymond said, “At that time, we announced anexpectation that the near-term benefits would total $2.8 billionannually, on a pre-tax basis. Since that time, our businesstransition teams have done a lot more planning and analysis aroundhow to combine the two companies and, at the same time, reorganizehow we manage the business-with a clear goal of maximizing thecompany’s overall performance.”

Raymond said the Dec. 1, 1998 projection of a worldwidereduction in workforce of about 9,000 may also be revised in thenew forecast. Exxon Mobil’s corporate headquarters are up andrunning in Irving, TX. The board of directors has taken all thenecessary actions to complete the merger. Each of the functionalbusiness line headquarters offices in Houston and Fairfax are inoperation, and organizational plans have been developed forregional centers and other key office locations.

Five global upstream companies-Exploration, Development,Production, Gas Marketing and Upstream Research-will beheadquartered in Houston along with the Chemical company and theCoal and Minerals company. Four downstream companies-FuelsMarketing, Lubricants & Petroleum Specialties, Refining &Supply, and Research and Engineering-will be based in Fairfax,Virginia.

Exxon Mobil has a presence in nearly 200 countries. The companyhas exploration or production operations in some 50 countries. Thecompany sells fuels and chemicals in about 120 countries and lubesin almost 200. Major manufacturing facilities for these productsare strategically located in 24 countries. Mobil brings majorliquefied natural gas (LNG) assets and experience to the combinedcompany, complementing Exxon’s gas assets and gas-to-liquidstechnology.

In related merger news, Exxon Mobil agreed to sell Exxon’sNortheast and Mobil’s Mid-Atlantic service stations and supplyarrangements to Tosco Corp. The agreement also gives Tosco theright to acquire Mobil’s Manassas, VA, terminal and undevelopedproperties intended for service station use in the Northeast andMid-Atlantic regions. The sale involves 1,740 service stations fromVirginia through Maine, including 686 owned or leased propertiesand the assignment of contracts covering some 1,054 dealer anddistributor sites.

The purchase price of about $860 million plus land-bank sitesand terminal will be financed with available cash and debt. Toscodoes not anticipate issuing additional equity.

The assets and supply arrangements involved in the Tosco salesatisfy the conditions required by the Federal Trade Commission andstates who signed a parallel consent order approving the merger.The FTC gave the go-ahead for Exxon and Mobil to merge Nov. 30 (seeDaily GPI Dec. 1). Terms of the deal between Exxon Mobil and Toscorequire regulatory approval.

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