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http://www.nytimes.com/2008/11/16/business/16exxon.html?_r=1&partner=rssnyt&emc=rss

SIX years of relentlessly rising prices have showered the oil industry with record profits even as whipsawing energy costs have left many Americans alternately furious and baffled.

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Exxon’s liquefied natural gas plant in Qatar. The company is under pressure as more governments take control of their oil and gas fields and environmentalists push for limits on fossil fuels.

Now that the roller coaster ride appears to be screeching to a halt, one corporate giant remains confident it can weather the slowdown and uncertainty better than its rivals.

“It’s not that we like lower prices, but our competitive advantage is more obvious to people in a low-price environment,” says Rex W. Tillerson, the chairman and chief executive of Exxon Mobil, the world’s largest, mightiest oil company. “But in a high-price environment, our competitive advantage has been quite evident as well.”

However undaunted Exxon feels, it’s still facing more complicated scenarios than mere price shifts. It’s straining to adjust to a host of potentially seismic issues that raise pointed questions about its long-term strategy. Oil reserves are harder to find, resource-rich governments have become more assertive, and global warming concerns have spurred forceful calls to action on environmental matters.

Moreover, with the election of Barack Obama, a new chapter is about to open for the nation’s energy policy. Mr. Obama says he wants to move away from oil dependence, and his policies are likely to emphasize conservation, alternative energy sources and new limits on the emissions of greenhouse gases responsible for climate change.

The question for Exxon, which Mr. Obama repeatedly singled out as an exemplar of corporate greed during the presidential campaign, is whether the model that has served the company so well for so long will keep it competitive — or whether it will still be producing hydrocarbons long after the world has moved away from dirty fuels.

Last year, Exxon, which is based in Irving, Tex., celebrated its 125th anniversary, marking a straight line that connects it to John D. Rockefeller’s original Standard Oil Trust before the government broke up the enterprise. While other oil companies try to paint themselves greener, Exxon’s executives believe their venerable model has been battle-tested. The company’s mantra is unwavering: brutal honesty about the need for oil and gas to power economies for decades to come.

“Over the years, there have been many predictions that our industry was in its twilight years, only to be proven wrong,” says Mr. Tillerson. “As Mark Twain said, the news of our demise has been greatly exaggerated.”

FROM a purely financial standpoint, there’s no doubt that Exxon’s business strategy has paid off. Despite the broader economic turmoil, Exxon is worth around $375 billion — more than General Electric, Bank of America and Google combined — making it the world’s largest corporation.

Its balance sheet is pristine and its credit rating is better than that of most governments. If Exxon’s revenue were stacked against the world’s G.D.P.’s, it would rank between Austria and Greece as the 26th-largest economy. As oil prices peaked this summer, the company once again set a record as the most profitable American corporation, earning $14.8 billion in the third quarter. Since 2004 alone, the company has rung up profits of about $180 billion.

Throughout its various incarnations — the Standard Oil Trust, Standard Oil of New Jersey, the Exxon Corporation, and now Exxon Mobil — the company has been an ambiguous fascination for many Americans. It is an enduring icon, as lasting as Coca-Cola or General Electric, but also a perennial corporate villain, one that reminds the nation of its dependence on hydrocarbons.

For some, the environmental impact of that earnings gusher outweighs the financial gains.

“Being Exxon is never having to say you’re sorry,” says Kert Davies, the research director at Greenpeace, the environmental advocacy group that has battled with Exxon for years.

On the financial front, however, Exxon’s jaw-dropping results have continued to leave many analysts beaming.

“It’s the world’s greatest company, period,” says Arjun N. Murti, a Goldman Sachs oil analyst. “I would put Exxon up against any other company at any other period of time.”

“It is also the most misunderstood company in the world,” he adds. “For many people, the image of Exxon is the Exxon Valdez. But there is much more to Exxon than that. Somehow, Exxon has persevered over the past 100 years with the best culture and management team any company could have.”

What might be called the Exxon Way can be summed up in three ideals: discipline, patience and long-term vision. It is a formula the company drills into its managers from the moment they join Exxon, and which it keeps repeating through their careers. It explains the company’s resilience and its view that it has survived, and thrived, through countless commodity cycles.

“We are all homegrown,” Mr. Tillerson says. “That happens through a very deliberate and very closely managed process, and it starts the day the person walks through the door with us. And we are the product of that system. If there is a DNA it is something you grow into after many years of working with your colleagues. It is clearly the defining strength of the company.”

TAKE a room full of oil managers, and the Exxon people usually stand out, even as they try not to draw much attention to themselves. They typically band together, and often cultivate an aura of secrecy — and sometimes superiority — toward the outside world.

At Exxon, the engineers rule. From its very early days, the company has focused relentlessly on one thing: finding more ways to squeeze every penny out of each barrel of oil.

Mr. Rockefeller was an accountant who was obsessed with efficiency, and his fixations still run through the company’s veins, says Joseph Allen Pratt, a historian and management professor at the University of Houston. Mr. Pratt is writing the fifth volume of Exxon’s official corporate history, which the company is partly financing.

NYTimes.com. Where the conversation begins.

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