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Tremors From Cheap Oil

Plunging prices spur the world's biggest merger and reshape petro politics

Exxon Chairman Lee R. Raymond says he longs for the days of $20-a-barrel oil. So does every other oil executive. But what makes Raymond and his company different is how well they tolerate today's $11-a-barrel price. The lowest inflation-adjusted oil prices of the past half-century have other oil companies running for cover, and once-standoffish oil-producing nations are suddenly desperate for strong partners. Yet, Exxon Corp.--perhaps the most efficient of the majors--is ideally placed to cash in.

And on Dec. 1, it made its first move, announcing the biggest takeover in corporate history: a $75 billion stock deal to purchase Mobil Corp. and forge the world's largest oil company. As the chief executive of $181 billion Exxon Mobil Corp.--a behemoth fully a third larger than No. 2 Royal Dutch/Shell Group--Raymond will be able to seize global opportunities that are unavailable to weaker competitors.