Exxon Mobil reported fourth-quarter profit of $8.9 billion due to higher oil prices.

HOUSTON – Exxon Mobil, America’s largest oil company, reported its highest earnings in seven years on Tuesday as it steered a wave of rising oil and natural gas prices.

Heralding its financial return after several years of mediocre earnings and criticism for its environmental performance, the company said it would continue to buy back its stock for $10 billion in two years. next year, its first acquisition since 2016.

Exxon said it made $8.9 billion in the three months ended December on $84.9 billion in revenue. The company made $6.8 billion in the third quarter. For the year, Exxon made $23 billion, compared with a loss of $22.4 billion in 2020 as oil and gas prices plummeted because of the economic downturn caused by the pandemic. Highest annual profit since 2014.

However, the company’s success is largely due to the recovery in oil prices throughout 2021, when energy demand picks up again.

By the end of the fourth quarter, the price of West Texas Intermediate crude, the US benchmark, had increased by more than 50%, reaching an average of $67 per barrel in December. Oil prices continued to climb over $80 per barrel due to limited supply. tightening and tension between Russia and Ukraine. Natural gas prices jumped more than 40% year-over-year in the quarter and have rebounded in recent weeks as temperatures drop in many areas.

Darren Woods, Exxon’s chief executive officer, said: “We’ve made tremendous progress in 2021 and our plans ahead position us at the forefront of cash flow and earnings growth. performance and energy conversion”.

The company reports that it has increased oil and gas production by 2% from 2020, largely due to increased production in the Permian basin located between Texas and New Mexico, and off the Guyana coast in South America. It also reported improved margins in its refining business, despite continued slumping jet fuel demand.

Addressing growing concerns about climate change, Mr Woods told analysts in a conference call on Tuesday that the company was committed to investing in carbon capture and sequestration, a biofuel studies such as renewable energy diesel and hydrogen.

“There is growing recognition and growing acceptance of the need for a variety of approaches to ensure that we make progress in reducing emissions but at the same time,” said Mr. Woods. does not harm people’s quality of life. ”

Shares of Exxon were up 5% Tuesday morning. Still, Exxon’s stock price remains below what it was a decade ago. In response to mediocre returns, investors have pressured Exxon and other oil companies to control spending and improve shareholder returns with dividends and share buybacks.

Last month, the company said it would spend between $20 and $25 billion a year on investments through 2027, down 33 percent from its spending plan before the pandemic sent oil prices plummeting in 2020. .

Returning cash to shareholders is part of an industry-wide departure from automatically investing in more production and buying up oil and gas reserves. That trend has supported stock prices but also limited US oil production below 2019 levels.

On Monday, Exxon announced that it is streamlining its businesses, combining its chemical, refining and marketing businesses and managing technology and engineering units to save more than $6 billion over the next two years compared to 2019. The company will move its headquarters to a Houston suburb, where most of its operations have been centered on a 385-acre campus, from Irving, a suburb of Dallas.

On Tuesday, Mr. Woods said the new structure would “further strengthen our competitive advantage”.

https://www.nytimes.com/2022/02/01/business/exxon-earnings-4q-2021.html Exxon Mobil reported fourth-quarter profit of $8.9 billion due to higher oil prices.

Fry Electronics Team

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