Spill unlikely to hurt Exxon's earnings

Exxon Mobil, whose ruptured Silvertip pipeline in Montana poured as much as 1,000 barrels of crude into the Yellowstone River, is unlikely to see earnings fall as a result of the spill, analysts say. Exxon may be spending about $750,000 (Dh2.7 million) a day on a cleanup effort that includes more than 500 people, said Richard Boes, a case management specialist with the US.Coast Guard's National Pollution Funds Centre. It was set up to manage the government's spill response costs, which Exxon will reimburse. "Given Exxon's size and financial strength, I really don't view it as having a major impact," Brian Youngberg, an analyst for Edward Jones & Co in St Louis, said of the Montana incident, although it may tarnish the company's reputation or lead to more scrutiny of pipeline safety, he said. Article continues below Irving, Texas-based Exxon, the world's largest company by market value, said on April 28 that quarterly profit rose a fifth- straight time, climbing 69 per cent to $10.7 billion as sales gained 26 per cent to $114 billion. "This is no Deepwater Horizon," Steve Merritt, the US Environmental Protection Agency's on-site coordinator for the spill response, said at a news conference. The Deepwater Horizon drilling rig exploded in April 2010 in the Gulf of Mexico 80km southeast of Venice, Louisiana, killing 11 and releasing some five million barrels of crude. BP has spent $17.7 billion on the cleanup of what is the largest oil spill in US history. The 110km Silvertip line was transporting about 40,000 barrels a day prior to the leak and runs from Elk Basin, Wyoming, to Exxon's refinery in Billings. Most of the oil from Exxon's pipeline is concentrated within 48km of the spill site near Laurel, Montana, about 24km southwest of Billings, Merritt said. The high flood level of the Yellowstone has reduced the visibility of oil on the river's main course, although inland areas and islands remain soaked, he said. Work plan The EPA ordered Exxon on July 6 to complete its clean-up efforts by September 9 after following a "work plan" detailing a process for restoring the riverbank and surrounding land. The company submitted a draft plan yesterday and it is under federal review, Merritt said. When approved, it will be released to the public. Drinking water and air quality in the spill zone is safe and the spill has not compromised irrigation for agriculture, Merritt said.