Exxon Mobil quarterly profits tumble on poor refining and chemicals results

MOSCOW (MRC) -- Exxon Mobil reported that its first-quarter profits fell nearly 50% from a year ago, hit by poor results in its refining and chemicals segments, said Cnbc.

Shares of the oil giant were down more than 2% on Friday. Exxon reported a quarterly loss in its downstream business, which focuses on refining oil into fuels like gasoline and diesel. The company said brimming stockpiles of gasoline led to weak fuel margins during the quarter. It also continued a heavy slate of refinery maintenance.

That maintenance has weighed on downstream profits in recent quarters, and Exxon warned analysts on Friday that it will continue in the second quarter of 2019. Profits in the chemicals business also tumbled USD219 million from a year ago. While Exxon sold more chemicals, profit margins came under pressure because the industry has recently added capacity.

The oil major’s output of crude, natural gas and other fossil fuels reached 4 million barrels of oil equivalent, up 2% from last year. Still, income in the upstream exploration and production unit fell by USD621 million from last year. While crude oil prices strengthened, they still remained relatively weak, Exxon said.

“Solid operating performance in the first quarter helped mitigate the impact of challenging Downstream and Chemical margin environments,” Exxon Chairman and CEO Darren Woods said in a statement.

Exxon earned USD2.35 billion in the first quarter, compared with USD4.65 billion a year ago. Earnings per share came in at 55 cents, compared with 70 cents forecast by a Refinitiv survey. Revenues were USD63.63 billion, down 6.7% from a year ago and short of analysts’ estimates for USD64.82 billion.

Exxon also saw capital and exploration expenses increase from USD4.87 billion a year ago to USD6.89 billion this quarter. The results showed Exxon continuing to increase its oil and natural gas production after the energy giant broke a streak of declining output last quarter. The company’s production figures were in line with Wall Street expectations, according to StreetAccount.

Last month, Exxon announced plans to hike oil and gas production from the Permian Basin by 80 percent, with a goal of pumping 1 million barrels of oil equivalent per day as soon as 2024. The Permian is the top U.S. shale oil region, stretching across western Texas and southeastern New Mexico. On Wednesday, Exxon raised its quarterly dividend by 5 cents to 87 cents per share.
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MOSCOW (MRC) -- BP and Azeri state energy company SOCAR plan to start construction of a new petrochemical plant in Turkey at the end of 2020, SOCAR’s Turkey Enerjji project director said, said Businessturkeytoday.

BP and SOCAR signed an agreement for the construction of the plant in 2018.

"A tender for the design of the complex has been announced and three companies are taking part in it ... Results will be announced next month," Emil Alkhasly told Reuters.

He said that construction was expected to be completed by 2023.

Capacity is designed to be 1.250 million tones of purified terephthalic acid, 840,000 tonnes of paraxylene and 340,000 tonnes of benzene.

The cost of the project is expected to be USD1.8 billion.

SOCAR is known as the largest foreign investor in Turkey with a total investment of USD 19.5 billion to include Star refinery in Izmir that cost of USD 6.3 billion
MRC

MOSCOW (MRC) -- Saudi Basic Industries Corp (SABIC), the world’s fourth-biggest petrochemicals company, reported a 38 percent drop in first-quarter net profit due to lower average selling prices, missing analysts’ expectations, said Reuters.

SABIC made a net profit of 3.41 billion Saudi riyal (USD909 million) in the three months to March 31, down from 5.51 billion riyals in the year-earlier period, the company said in a bourse statement on Sunday.

Analysts expected SABIC to make a net profit of 3.98 billion riyals in the first quarter, according to the average of estimates of five analysts polled by Refinitiv.

SABIC said average prices decreased by 8 percent quarter-on-quarter, driven by slowing global demand, a slow start to the year and relatively high level of inventories.

It expected SABIC’s performance to be in line with trends in the global petrochemical industry, even though it cautioned that global economic growth will be lower this year.

The company’s results are closely tied to oil prices and global economic growth because its products - plastics, fertilisers and metals - are used extensively in construction, agriculture, industry and the manufacturing of consumer goods.

Saudi national oil giant Aramco last month reached an agreement with the Public Investment Fund to buy its controlling stake in SABIC for USD69.1 billion.
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MOSCOW (MRC) -- Employees of Royal Dutch Shell ended a strike in the Netherlands after unions agreed to a new wage offer by the oil and gas company, said Reuters.

Strikes which started on April 8 at the 400,000 barrel per day Pernis refinery, Europe’s largest, and the Moerdijk plants will be suspended while union members vote on final approval of the offer put forward by Shell, union CNV said.

"Shell has offered an improved and ultimate proposal for the Collective Labour Agreement (CLA) for Pernis and Moerdijk to the unions," a Shell spokesman said late on Thursday.

“Higher than initially planned, the headroom was found by extending the CLA to 3 years,” he added.

The Shell offer includes a pay rise of 3 percent in 2019, 2 percent in 2020 and 2.5 percent in 2021, the spokesman said. An additional merit-based increase of 1.5 percent per year will be available during the three years.

Shell said it expected the unions to end the strike on Friday afternoon.
MRC

MOSCOW (MRC) -- Nigeria and Saudi Arabia plan to draft a memorandum of understanding on an oil and gas partnership that could lead to the construction of a new refinery and investments in liquefied natural gas, reported Reuters with reference to Nigeria’s petroleum ministry.

Nigeria imports the bulk of its petrol, despite being Africa’s biggest crude oil producer, due to its dilapidated refineries. Last month, Nigeria’s state oil company said it was in talks with different consortiums to overhaul its refineries and save billions of dollars on fuel imports.

Nigeria’s petroleum ministry, in a statement issued days after oil minister Emmanuel Kachikwu held talks with Saudi energy officials, said an early draft of a memorandum of understanding would be ready in the first week of May.

"Areas of interest will cover the existing refinery revamp, building of a brand new refinery, LNG investments and product supply trading in crude and refined products," the ministry said in the statement.

It added that Saudi energy minister Khalid Al-Falih had reiterated the possibility of establishing an independent refinery in Nigeria, considering it the best hub from which to reach other African countries.

Saudi Aramco is expanding its downstream operations such as refining and petrochemicals production as part of its drive to become the world’s largest integrated energy firm.

As MRC informed earlier, Saudi Aramco will acquire Royal Dutch Shell’s 50 percent stake in the Saudi refining joint venture SASREF for USD631 million. The purchase, which is part of Aramco’s strategy to expand its downstream operations, will be completed later this year.

Saudi Aramco, officially the Saudi Arabian Oil Company, is a Saudi Arabian national oil and natural gas company based in Dhahran, Saudi Arabia. Saudi Aramco"s value has been estimated at up to USD10 trillion in the Financial Times, making it the world"s most valuable company. Saudi Aramco has both the largest proven crude oil reserves, at more than 260 billion barrels, and largest daily oil production.
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