ExxonMobil flags highest quarterly profit since boom year of 2008
ExxonMobil has estimated quarterly profits that could be the highest in more than a decade after Russia’s invasion of Ukraine drove oil and natural gas prices sharply higher.
The US energy supermajor said in a regulatory filing on Monday that its first-quarter profits could total as much as $11bn, which would we be the most since 2008, when crude oil prices soared to a record high of nearly $150 a barrel.
Brent crude prices have surpassed $100 a barrel this year as western sanctions placed on Russia in punishment for its attack on Ukraine have threatened to exacerbate shortfalls in oil supplies. Brent was trading at about $108 a barrel on Monday.
Exxon’s bumper earnings preview comes two days before Darren Woods, chief executive, is scheduled to appear before a committee of the US House of Representatives to address high petrol prices, alongside other executives from oil companies including Chevron, BP and Shell.
Exxon said that profits in its upstream oil and gas production division could be as much as $8.3bn in the first quarter of the year, $2.2bn higher than the fourth quarter and the highest for any quarter since 2017.
While high oil and gas prices will boost earnings of its production business, Exxon said that overall earnings could be weighed down by as much as $700mn related to price hedges in its fuels business and weaker profit margins in its chemicals unit. The company will issue a final earnings report on April 29.
The company’s shares were down about 1 per cent on Monday, though they are up about 30 per cent so far this year as oil stocks have rallied alongside the price of crude.
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Exxon last month announced it would exit the huge Sakhalin-1 oil and gas project in eastern Russia in response to the Ukraine invasion. Monday’s regulatory filing said Exxon could be forced to write down up to $4bn for the project, while the company was “proceeding with efforts to discontinue operations” at the project.
Separately, a consortium led by Exxon said it had taken a final investment decision to develop a $10bn oil-producing project in waters off Guyana, which it says will produce a total of 250,000 barrels a day when it starts up in 2025.
The company is ploughing billions of dollars into the area after a number of large discoveries in the South American country that could ultimately pump more than 1mn b/d, more than the UK currently produces.
