Oil Company PR Men under Fire IRAQ-CRISIS PROFITS

By Scott Pendleton, writer of The Christian Science Monitor | The Christian Science Monitor, February 7, 1991 | Go to article overview
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Oil Company PR Men under Fire IRAQ-CRISIS PROFITS


Scott Pendleton, writer of The Christian Science Monitor, The Christian Science Monitor


WHAT does it take to be an oil company public relations manager?

"You have to be somewhat of a masochist because you're on the defensive, it seems like, all the time," says Jere Smith, director of media relations for Phillips Petroleum Company, in Bartlesville, Okla.

In normal times an oil company spokesman would be preoccupied answering seemingly endless environmental criticisms, or dispelling the notion that "the oil companies" bought the patent to a fuel efficient engine to keep it off the market and protect gasoline sales. ("No, there is not a 300-mile-per-gallon carburetor sitting out here," the Phillips spokesman says. That old myth "still pops up.")

Times have not been normal for oil's public relations officials since Iraq invaded Kuwait Aug. 2. The cost of gasoline and oil company earnings jumped dramatically and then moderated, bringing new accusations: price gouging and windfall profits.

"Will we once again allow the multinational oil companies to profiteer at the expense of our constituents?" Rep. Paul Kanjorski of Pennsylvania asked last month in introducing a bill to tax "undeserved war gains."

Profiteering is "a pretty nasty thing to be accused of," says Larry Shushan, manager of media relations for Chevron Corporation in San Francisco. It means "gleefully and intentionally taking advantage" of people who are in a bind, he says. "That certainly isn't the case at all." The real case, according to oil industry PR men, is this:

- Market forces beyond the control of oil companies drove up the price of oil, and therefore company profits. The same forces have driven prices down again.

- 1989's fourth quarter was one of weak earnings for oil companies, made worse for some by colossal one-time expenses: Exxon, $800 million for the Valdez oil spill; Chevron, a write-down of $1.2 billion mainly spent to develop an oil field that regulators won't let produce. Even an ordinary 1990 fourth quarter would have compared very favorably.

- During the 1980s, when other United States industries had a 14 percent rate of return, oil had a 10 percent return. Shushan says that Chevron's earnings are back up to the level of 10 years ago.

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Oil Company PR Men under Fire IRAQ-CRISIS PROFITS
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