Exxon CEO speaks: We erred on the side of caution

About a month ago, this blog returned to the subject of Blackbeard, at one time the most-watched oil-drilling project in the world, a gigantic oil and gas field in the Gulf of Mexico that ExxonMobil abandoned just short of finishing the job after spending $180 million on it. Now, Jad Mouawad at the New York Times has gotten Exxon CEO Rex Tillerson (above) to confirm what others had told me about the well: that the company stopped its 2006 drilling because of a kick that made them frightened of a blowout.

Of course, it’s self-serving for Exxon to go public right now, wave the flag, and boast about its years of prudence. The entire industry’s image, and financial well-being, is on the line following BP’s catastrophic blowout in the Gulf. And bragging can’t but feel good for Exxon after the scorn meted out against the company when wildcatter Jim Bob Moffett went in just a year and a half later, drilled the rest of the distance, and struck oil at Blackbeard.

But it’s also true that since its 1989 tanker accident in Alaska, Exxon has hunkered down and become the most safety-conscious super-major in the industry. It does not intend to have another Exxon Valdez. And unlike BP’s similar remonstrations after its deadly 2005 refinery accident in Texas City, Texas, Exxon hasn’t had a repeat catastrophe.

Here is what Tillerson told Mouawad:

There was a pretty extensive discussion between the geoscientists, who wanted to keep going — here they were near their objectives — and the drillers, who were saying, "We are just really not comfortable."

But then Tillerson erred on the side of caution. He said:

We were right at the ragged edge and they felt the risk was too great.

Exxon’s share price continues to trade near its 52-week low — the market doesn’t see a growth story in the stock. But Tillerson’s remarks underscore that Exxon has always been a different kind of investment play: a safe bet.