ExxonMobil and Competitors Experience Sharp Drop in Profits Due to Falling Oil Prices and Refining Margins

2023-07-28 13:19:05

The American oil and gas giant ExxonMobil suffered in the second quarter a sharp drop in its results, like its competitors, in the wake of the fall in the price of hydrocarbons but also of margins trimmed in refining.

Its net profit plunged 56% to $7.9 billion in the second quarter.

Turnover also melted, to settle at 82.91 billion dollars between April and June, once morest 115.68 billion over the same period of 2022.

His compatriot Chevron also announced a sharp decline in its quarterly performance on Friday, as did the British giants Shell and French TotalEnergies the day before.

The barrel of Brent oil from the North Sea sold on average at 78.1 dollars in the second quarter, far from the almost 114 dollars on average at the same time of 2022.

Reported by share and excluding exceptional items – reference data for analysts – the net profit of ExxonMobil stands at 1.94 dollars once morest 4.21 dollars a year earlier.

This is below analysts’ expectations for this line of accounts (2.01 dollars discounted), but the turnover is better than expected.

“The work we’ve done to improve our underlying profitability is reflected in our second quarter results, which doubled what we earned in a comparable commodity price environment five years ago,” he said. commented Darren Woods, boss of the group, quoted in a press release.

The giant made record profits in 2022 thanks to the jump in the price of hydrocarbons linked to the recovery in demand and a reduction in supplies in Russia with the war in Ukraine.

– Fall in prices –

US oil prices hit their highest closing level in three months ($81.07) a week ago, amid pledges from Saudi Arabia and Russia to cut volumes.

But, underlined ExxonMobil, a fall in the price of natural gas (-40% according to him) and lower margins in the refining activity “negatively affected the results” in the second quarter, to the tune of nearly 4 billion. of dollars.

Larger-than-expected seasonal maintenance operations also weighed on activity.

The giant also indicated that production in the Permian basin, straddling Texas and New Mexico, and in Guyana had increased by 20% over one year.

Total production reached 3.7 million barrels of oil equivalent per day (boed).

With the sale of assets and the exit from its Sakhalin-1 oil field in Russia, net production increased by just 160,000 bopd.

ExxonMobil said it remains on track to meet its savings target of $9 billion by the end of 2023, compared to 2019. It has already achieved $8.3 billion.

The group returned to its plan to buy Denbury, an American company specializing in CO2 capture valued at $4.9 billion, announced on July 13.

It aims to strengthen its Low Carbon Solutions branch by offering industry on the Gulf Coast of Mexico a capacity to reduce 100 million tonnes of CO2.

It has also concluded an agreement with the American steelmaker Nucor to take charge of up to 800,000 tonnes per year of emissions from its Convent site in Louisiana (southeastern United States) from 2026.

This transaction brings to 5 million tons per year the capacity that ExxonMobil has committed to process for third parties, which “equivalent to replacing approximately two million combustion cars with electric vehicles”.

Its action was almost stable (-0.17% to 105.24 dollars) in trading before the opening of the New York Stock Exchange.

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