Exxon smashes Western oil majors’ profits with $56 billion in 2022

HOUSTON, Jan 31 (Reuters) – Exxon Mobil Corp (XOM.N) posted a $56 billion web revenue for 2022, the corporate mentioned on Tuesday, taking house about $6.3 million per hour final 12 months, and setting not solely an organization report however a historic excessive for the Western oil business.

Oil majors are anticipated to interrupt their very own annual information on excessive costs and hovering demand, pushing their mixed take to close $200 billion. The scale has renewed criticism of the oil business and sparked requires extra nations to levy windfall revenue taxes on the businesses.

Exxon’s outcomes far exceeded the then-record $45.2 billion web revenue it reported in 2008, when oil hit $142 per barrel, 30% above final 12 months’s common worth. Deep price cuts through the pandemic helped supercharge final 12 months’s earnings.

“Overall earnings and money stream have been up fairly considerably 12 months on 12 months,” Exxon Chief Financial Officer Kathryn Mikells instructed Reuters. “So that got here actually from a mix of sturdy markets, sturdy throughput, sturdy manufacturing, and actually good price management.”

Exxon mentioned it incurred a $1.3 billion hit to its fourth-quarter earnings from a European Union windfall tax that started in the ultimate quarter and from asset impairments. The firm is suing the EU, arguing that the levy exceeds its authorized authority.

Excluding expenses, revenue for the complete 12 months was $59.1 billion. Production was up by about 100,000 barrels of oil and gasoline per day over a 12 months in the past to three.8 million bpd. Adjusted per-share revenue of $3.40 beat consensus of $3.29 per share, in line with Refinitiv knowledge.

Shares have been up about 1% at $114.70.

“It’s a headline beat,” Biraj Borkhataria from RBC Capital mentioned in a word, regardless of decrease chemical margins, lower-than- anticipated downstream features and plans for increased upkeep works in refineries this quarter.

WINDFALL TAXES

The outcomes might arrange one other confrontation with the White House. President Joe Biden’s administration on Friday blasted oil corporations for pouring money into shareholder payouts somewhat than manufacturing. Exxon distributed $30 billion in money to shareholders final 12 months, greater than any of its Western rivals.

Windfall revenue taxes are “illegal and unhealthy coverage,” countered Mikells. Slapping new taxes on oil earnings “has the alternative impact of what you are attempting to attain,” she mentioned, including that it could discourage new oil and gasoline manufacturing.

Exxon boasted that its money stream from operations soared to $76.8 billion final 12 months, up from $48.1 billion in 2021. And it determined to carry $30 billion in money steadiness. The firm mentioned it realized from the pandemic, when it discovered itself empty handed and raised debt to pay dividends to shareholders.

“Having a extremely sturdy steadiness sheet is a aggressive benefit for us,” Mikells mentioned, including that it permits the corporate to attend for potential acquisition alternatives and maintain its dividend program intact even when vitality costs finally fall.

Exxon posted $12.8 billion in fourth-quarter web revenue excluding expenses, 44% greater than the identical interval final 12 months however down 35% from the earlier quarter as oil costs eased and a few operations suffered from cold-weather-related outages.

PROJECT SPENDING

Exxon’s spending on new oil and gasoline tasks bounced again final 12 months to $22.7 billion, up 37% from the prior 12 months. The firm elevated outlays on discoveries in Guyana, in the highest U.S. shale subject, and on gasoline refining and chemical compounds.

“The counter-cyclical investments we made earlier than and through the pandemic offered the vitality and merchandise folks wanted as economies started recovering,” Exxon Chief Executive Officer Darren Woods mentioned in an announcement.

Investments can go as much as $25 billion this 12 months, Woods mentioned. Part of it’s defined by rising prices in the Permian, with inflation in the double digits, amid “actually, actually scorching” demand for equipments and providers, he mentioned.

Exxon guided Permian manufacturing this 12 months to 600,000 bpd, up 50,000 bpd from final 12 months however barely under market expectations. On the opposite hand, Woods projected that sturdy refining margins will proceed in 2023.

Exxon’s outcomes come forward of what are anticipated to be sturdy earnings from Shell plc on Thursday and from BP plc and TotalEnergies subsequent week.

Reporting by Sabrina Valle in Houston; Additional reporting by Mrinalika Roy in Bengaluru; Editing by Christian Schmollinger and Mark Porter

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