Transcript: Rex Tillerson, ExxonMobil CEO

CHARLES GIBSON: But aren't we, in effect, hostage to political developments in those areas? You look at Georgia just in the last couple of days. And you're worried because of that pipeline, maybe that's going to unsettle oil prices. Any kind of dislocation with Saudi Arabia would be catastrophic in this country.

REX TILLERSON: Well, the response to that, what you're really onto, is a very important point, is you're onto the point of energy security.

CHARLES GIBSON: Sure.

REX TILLERSON: And I think the response to that is to have as many diverse supplies of energy as possible. And that means both in terms of geographic diversity. You want to expose yourself or certainly have access for the American people to as many different geographic sources of supply as possible. So the disruption in one area does not leave you, as you point out, hostage to any one area.

Secondly, though, you also want to expand your sources of supply in terms of developing all the alternatives that are available. And that's why the long-term answer, Charlie, is really we've got to develop everything. And to be making -- trying to pick winners and losers and make choices that say we have to get off this in order to get onto that, that's not a sustainable long-term policy. And it's not going to provide the answers that we're looking for.

CHARLES GIBSON: We in the media have made a lot of the profits that ExxonMobil has made, particularly in the last couple of quarters -- more than $10 billion in profits first quarter this year; more than $11.5 billion in the second quarter of the year. When people, I don't know, complain about that to you or say how dare you? Those profits are obscene. What's your best -- in brief form -- what's your best justification?

REX TILLERSON: Well, I think it has to do with an ability to understand just the size of our business. Everything we do, the numbers are very large. I saw someone characterize our profits the other day in terms of $1,400 in profit per second. Well, they also need to understand we paid $4,000 a second in taxes, and we spent $15,000 a second in cost. We spend $1 billion a day just running our business. So this is a business where large numbers are just characteristic of it.

CHARLES GIBSON: When profits are so high, why is spending on exploration so low?

REX TILLERSON: Well, we're spending at record levels. Through the first half of this year, we have spent $12.5 billion. That's a record level of capital and exploration expenditures for us. We expect we will spend about $25 billion this year. And we have forecast over the next five years that we will invest $125 billion in capital and exploration expenditures. And to give you some perspective on that, that's a little more than half of what all 13 OPEC nations are going to invest as they've announced. So we are investing at record levels and expect that we will continue to be doing that in the years ahead.

CHARLES GIBSON: You're spending more money buying back stock than you are on exploration.

REX TILLERSON: Well, that's a cash flow question, Charlie, in terms of how should we manage our cash flow. And that's important for our shareholders, obviously. It's important for our future health as well.

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