Newspaper article THE JOURNAL RECORD

Fallout Continues for Exxon Corp

Newspaper article THE JOURNAL RECORD

Fallout Continues for Exxon Corp

Article excerpt

NEW YORK (AP) - The furor over the worst oil disaster in U.S. history has died down but the fallout continues for Exxon Corp. in the form of a sullied reputation and a stagnant stock price.

After a bad 1989 following the disastrous March spill off the Alaskan coast, the nation's largest oil company began the year with a Jan. 2 pipeline rupture that left 567,000 gallons of heating oil floating in the Arthur Kill waterway between New York City and New Jersey.

The latest spill has resulted in new lawsuits and accusations against the oil giant on top of more than 150 other suits stemming from the Alaska spill. The state of New Jersey is one of the plaintiffs over the latest pollution, which Exxon officials at first blamed on a faulty leak-detection system.

``What happened in New York-New Jersey further blackened the eye,'' said Frank P. Knuettel, oil industry analyst for Prudential-Bache Securities Inc.

Exxon's stock lagged behind the overall industry's performance last year after the Alaska spill, remaining relatively flat at about $45. In comparison, stocks of Mobil Corp. and Chevron Corp. had gains of about 20 percent during that period.

In composite trading on the New York Stock Exchange Tuesday, Exxon stock closed up 12 1/2 cents at $47.12 1/2 a share.

The total financial impact of the Arthur Kill spill is unknown. Exxon has offered to pay for environmental studies and damages associated with the leak.

Cleanup of the Alaska spill, which resulted when an Exxon tanker ran aground in Prince William Sound, has cost Exxon $1.9 billion so far, according to a U.S. Transportation Department estimate. Exxon officials acknowledge only ``over $1 billion'' in cleanup costs, with about a third of that covered by insurance. Exxon took an $850 million charge against second quarter earnings to cover its estimated out-of-pocket expenses for the spill.

Analysts say Exxon's fourth-quarter earnings, expected to be released this week, should be in line with the overall industry, showing lower refining, marketing and chemicals earnings and higher results in the exploration and production sector, due largely to higher crude oil prices. …

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