ExxonMobil may create its own trading business

ExxonMobil is studying whether it should create its own in-house commodity trading operation, a move that would run contrary to the fiscally conservative culture of the oil and gas giant.

The company formed an internal committee earlier this year to consider joining companies like BP and Shell that actively trade a wide range of commodities both for their own consumption and for profit, sources tell Argus. It is not clear when the committee, led by former vice-president of ExxonMobil supply and transportation Andy Madden, would present its finding to the board of directors.

ExxonMobil declined to comment. Jeff Woodbury, head of investor relations, deflected analyst questions about the possibility of a trading operation during the company's third quarter earnings call today.

"I will tell you that by and large we don't typically speculate or take positions in markets," Woodbury said. "Beyond that, in terms of the inter-workings and how we want to manage that going forward, there is really nothing more that I can share."

ExxonMobil has eschewed the example of other large integrated oil and gas companies that have operated their own trading operations for decades to help manage the ups and downs of commodity markets. The company does not even hedge any of its oil and gas production, relying on its scale as one of the world's largest holder of reserves, and the biggest integrated refiner and chemicals manufacturers, as well as its notoriously strict attention to cost controls.