Posted in: 29/07/2022 – 21:04
New York (AFP) – The two American oil giants Exxon Mobil and Chevron achieved record profits in the second quarter of the year, at a time when the administration of President Joe Biden blames them for not doing enough to curb price hikes at gas stations.
With the sharp rise in oil prices to more than $100 a barrel following the start of the Russian invasion of Ukraine on February 24, ExxonMobil and Chevron posted profits of $17.9 and $11.6 billion, respectively, during the second quarter of this year.
The benefit of the current situation is not limited to the two American companies alone, but European oil companies also achieved huge net profits of $18 billion for Shell, $5.7 billion for Total Energies, and $3.8 billion for Eni.
And the price of oil in trading in New York during this period ranged between 95 and 120 dollars a barrel.
After the price of oil had been on the rise for more than a year with the recovery of corporate and consumer demand, this trend accelerated in the spring to reach levels not seen since 2008 in light of the sanctions imposed on Russia.
This rise is considered one of the main factors behind the global inflation that has reached unprecedented levels for decades in the United States and Europe.
The US administration accuses companies in this sector of enriching themselves at the expense of drivers without taking any steps to try to find a solution that would comfort consumers.
However, ExxonMobil and Chevron say they are making an effort.
In terms of production, ExxonMobil confirmed that it pumped the equivalent of an additional 130,000 barrels per day during the second quarter in the Permian Basin, located between Texas and New Mexico, while Chevron increased its production by 3% in the country.
ExxonMobil also indicates that its refineries’ refining capacity will increase by regarding 250 thousand barrels per day in the first quarter of 2023, “constituting the largest increase in the capacity of the sector in the United States since 2012,” what the company’s Chairman of the Board of Directors Darren Woods announced in a statement.
Generous dividend distribution to shareholders
With regard to refineries, the situation is more mixed.
The quantities that were refined at ExxonMobil refineries in the United States recorded a slight increase, while the quantities of oil transferred in Chevron refineries decreased by 8% due to maintenance work.
Overall, ExxonMobil’s revenue increased by 71% to regarding $115.7 billion, while Chevron’s revenue increased by 8% to $69 billion.
The two companies benefited from the sharp rise in the prices of refined products, which boosted their profits significantly, as well as from the increase in crude oil production and from the control of their expenses.
The two companies, which incurred large losses when the Covid-19 epidemic began, do not plan to use their profits to increase their investment spending this year, which remains at levels lower than before the epidemic.
In return, the two companies use this margin to reduce their debt and provide generous dividends to their shareholders.
In this context, ExxonMobil distributed to its shareholders a total of $7.6 billion during the quarter, while Chevron increased its share buyback program from $10 to $15 billion this year.
The price of Exxon Mobil shares increased by more than 3% during the first trading on Wall Street, compared to an increase of more than 7% for Chevron shares.
The big companies prefer to reduce their debt to face any economic consequences in the future. It has been trying for several years to adapt to the growing calls from civil society and a number of stakeholders to redirect activities to lower carbon energies to combat climate change.
© 2022 AFP
