Page 8 - NorthAmOil Week 05 2023

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ExxonMobil, Chevron profits soar

US THE US’ two largest oil companies, ExxonMobil
and Chevron, have posted record profits for the
fourth quarter of 2022.
ExxonMobil reported profits of $55.7bn in
2022. Its previous record was $45.2bn in 2008,
when oil prices were around $142 per barrel,
30% higher than in 2022. Its earnings for the
fourth quarter came in at $12.8bn, 44% more
than a year earlier but down 35% from the third
quarter of 2022. This came as crude prices eased
after a high in the late summer. those profits into padding the pockets of execu-
ExxonMobil’s adjusted profit of $3.40 per tives and shareholders while House Republicans
share beat analysts’ consensus of $3.29 per share. manufacture excuse after excuse to shield them
The super-major has the highest market cap- from any accountability,” a White House state-
italisation of any oil and gas producer globally. ment said.
The company’s high earnings can in large part For several months, Biden has criticised oil
be attributed to Russia’s war in Ukraine. This companies for their profits and claimed that they
has led to sanctions on Russian oil exports and were holding back on domestic production even
driven up prices for crude, gas, gasoline and die- as US consumers paid high prices last summer
sel as Western countries work to minimise their for gasoline at the pump. Democrats have threat-
exposure to energy purchases from Russia. ened to introduce a windfall tax on oil company
ExxonMobil’s cash flow from operations rose profits.
to $76.8bn in 2022, compared with $48.1bn in “We look at the EU tax on the energy sector,
2021. This came after the company cut its costs and you know, it’s just unlawful and bad policy
during the coronavirus (COVID-19) pandemic. trying to tax something, when what you actually
ExxonMobil’s full-year production increased need is for it to increase,” ExxonMobil’s Mikells
by about 100,000 barrels of oil equivalent per said. “It has the opposite effect of what you’re try-
day (boepd) compared with a year ago, to 3.8mn ing to achieve.”
boepd. Production from the Permian Basin in A few days earlier, Chevron – the second larg-
2022 came in at a record 600,000 bpd, up 50,000 est US oil producer – had posted record earnings
bpd from 2021. of $36.5bn for 2022, more than double its profits
“The counter-cyclical investments we made a year earlier. The company’s earnings for the
before and during the pandemic provided the whole of 2022 exceeded its previous record of
energy and products people needed as econo- $26.9bn in 2011.
mies began recovering,” said ExxonMobil’s CEO, In the fourth quarter, Chevron reported
Darren Woods, in a statement. adjusted earnings of $7.9 bn, or $4.09 per share,
“Overall earnings and cash flow were up below analysts’ estimate of a profit of $4.38,
pretty significantly year on year,” ExxonMobil’s according to Refinitiv data. Its profits from oil
chief financial officer, Kathryn Mikells, told Reu- and fuel were weaker than expected.
At issue for critics is the fact that Chevron
ExxonMobil’s ters. “So that came really from a combination of paid out $26bn in dividends and buybacks to
strong markets, strong throughput, strong pro-
adjusted profit of duction and really good cost control.” shareholders in 2022. It also invested $15.7bn in
However, the company identified a loss of operations.
$3.40 per share $1.3bn in its fourth-quarter earnings owing to This year, it said it will increase expenditure

beat analysts’ new European windfall taxes and an impair- on projects to $17bn, with two-thirds of that in
ment from the Sakhalin-1 project expropriation the US.
consensus of in Russia because of the military intervention in In the fourth quarter of 2022, the company’s
Ukraine. ExxonMobil is suing the EU, arguing global net production was 3.01mn boepd and
$3.29 per share. that it exceeded its authority in imposing a wind- 3mn boepd for the entire year, down 3% from a
fall tax. year earlier. But its US production rose 4% com-
In the fourth quarter, ExxonMobil’s expendi- pared with 2021, owing in large part to gains in
tures on capital and exploration totalled $7.5bn, the Permian Basin.
while its investments over the whole of 2022 Chevron separately announced that it would
amounted to $22.7bn. repurchase $75bn of its stock. The buyback plan
However, the super-major has come under is reportedly one of the largest ever.
fire from the administration of US President Joe This too has prompted criticism from
Biden for its record profits. Democrats.
“The latest earnings reports make clear “These profits are coming right out of your
that oil companies have everything they need, pockets,” tweeted California’s Democratic gov-
including record profits and thousands of ernor, Gavin Newsom in reference to Chevron’s
unused but approved permits, to increase pro- results. “It’s time for a gas price gouging penalty
duction, but they’re instead choosing to plough to keep greedy oil companies in check.”™

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