MOSCOW (MRC) -- ExxonMobil Corp joined a parade of oil companies posting downbeat results on plunging oil demand and collapsing prices, reporting a USD610 million first-quarter loss after a nearly USD3 billion inventory writedown, reported Reuters.
Global fuel demand has tumbled by a third on coronavirus-related lockdowns and business shutdowns. Oil giants largely have reported losses on weaker margins and writedowns from an oil glut that has sent prices to historic lows.
All of Exxon’s businesses posted lower profits or wider losses except for chemicals, where low oil and gas prices lifted earnings.
“COVID-19 has significantly impacted near-term demand, resulting in oversupplied markets and unprecedented pressure on commodity prices and margins,” said Exxon Chief Executive Officer Darren Woods.
Exxon’s results echoed those of rivals Royal Dutch Shell and BP, though Chevron reported a first-quarter profit gain due to asset sales.
The largest oil companies have largely sought to protect investor payouts by increasing borrowing or cutting expenses. Exxon, BP, and Chevron maintained their quarterly payouts while Shell cut its dividend for the first time since World War Two.
Exxon has cut this year’s project spending by USD10 billion and expects to reduce oil and gas output by 400,000 barrel per day in line with rivals. Chevron also plans to cut as much as 300,000 bpd this month and up to 400,000 in June.
Exxon posted a loss of USD610 million, or 14 cents per share, in the quarter, compared with a profit of USD2.35 billion, or 55 cents per share, a year earlier.
Excluding charges, adjusted profit was 53 cents a share, beating Wall Street’s forecast for an adjusted profit of 18 cents.
Earnings from oil and gas production fell 91% from a year ago on weak oil prices. Exxon’s volumes were higher, with its U.S. shale production up 56% from a year-ago.
Its refining business swung to a USD611 million operating loss on weak demand and inventory charges. Lower costs and gains from trading helped limit losses, the company said.
The chemical unit posted a profit of USD144 million, down 75% from a year ago but up from a fourth-quarter loss.
“The downstream in particular came in ahead of our expectations,” wrote RBC Capital Markets analyst Biraj Borkhataria. The chemicals unit “was a better result than any time in 2019,” he added.
Its shares were down 3% at USD45.03 in morning trading. The stock is down 34% this year.
Exxon’s production rose slightly to about 4 million barrels of oil equivalent per day (boepd) from 3.98 million boepd. A goal of producing 750,000 bpd from Guyana discoveries by 2025 would be pushed back a year, Exxon said.
As MRC informed before, in September 2019, ExxonMobil announced plans to spend GBP140 million over the next two years in an additional investment program at its Fife ethylene plant, which has a capacity of more than 800,000 t/y.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 383,760 tonnes in the first two month of 2020, up by 14% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased due to the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 192,760 tonnes in January-February 2020, down by 6% year on year. Homopolymer PP accounted for the main decrease in imports.
ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world's oil and about 2% of the world's energy.
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