Exxon Says It’s in Mood for Shopping

Exxon Corp., watched by Wall Street for signs of what it will do with its huge cash hoard, said Tuesday that it may spend more in 1988 on oil and gas acquisitions than the $1.8 billion it spent last year.

But top executives of the world’s largest oil company, which reported just over $3 billion in cash and marketable securities in its most recent quarter, said few businesses interested them at the moment.

“We could afford to buy anything but it has to fit. . . . There is not that much around that would enhance us,” Exxon Chairman Lawrence G. Rawl told reporters after a rare meeting here with industry analysts.

Among Exxon’s acquisitions last year was the purchase of Celeron Corp. from Goodyear Tire & Rubber. Rawl, who has been Exxon chairman for 14 months, ruled out hostile takeovers by the company.

Despite a drop in oil prices, Rawl said Exxon had budgeted $6.5 billion for 1988 capital spending on current businesses, up $1.2 billion from last year.

In 1987, Exxon spent about $7.1 billion on capital expenditures, but that figure included $1.8 billion for oil and gas property acquisitions, which are not included in the 1988 budget.

“I would not be surprised to exceed that, especially if attractive acquisitions are available,” Rawl said during the meeting with securities analysts.

Saudi Arabian Rumors

Rawl and other top executives said the company is prepared to sell some business assets but refused to comment on reports that Saudi Arabia has approached Exxon for a possible refining and marketing partnership.

“We are quite prepared to divest of assets when they do not meet our plans,” Exxon President Lee Raymond said. He did not detail which assets or where Exxon might consider selling.

When asked about reports that Saudi Arabia had contacted Exxon about a possible partnership, Rawl declined to comment. “This is such a hot topic,” Rawl said. “I can’t even comment on these things.”

Barry Good, an analyst with Morgan Stanley & Co., said before the Exxon meeting: “The Saudis are talking to all the Aramco partners, so whatever light Exxon can shed on those talks would be useful.” Aramco, or the Arabian American Oil Co., is owned by Saudi Arabia and operated by Exxon, Texaco, Mobil and Chevron.

In October, industry sources suggested that the Saudis and Exxon were holding initial talks about a partnership involving Saudi crude oil supplies and Exxon’s European refining and marketing businesses.

“The Saudis may not make a deal for a joint venture in the United States but may find it very appealing to work with a company like Exxon in Europe,” said Sanford Margoshes, an analyst with Shearson Lehman Hutton.

Raymond, in response to a question, said the interest of the Organization of Petroleum Exporting Countries producers in refining and marketing assets is not new. In the 1970s, Exxon had a refining agreement with Venezuela involving its Aruba refinery, he said.