MI Breaking News
Donate to and support MelodyInter
Kindly Donate to and support MelodyInter

 
Spread the news

WASHINGTON: The White House on Tuesday (Jan 31) expressed outrage at ExxonMobil Corp’s record net profit in 2022 of US$56 billion (RM238.7 billion), a historical high not just for the company but for the entire Western oil industry.

Oil majors are expected to break their own annual records due to high prices and soaring demand, pushing their combined take to near US$200 billion. The scale has brought renewed criticism of the oil industry and sparked calls for more countries to levy windfall profit taxes on the companies.

A White House statement said Exxon’s profit margin was particularly galling as Americans paid record high prices at the pump. It criticised attempts by Republicans in the House of Representatives to push policies aimed at supporting the oil industry.

“The latest earnings reports make clear that oil companies have everything they need, including record profits and thousands of unused but approved permits, to increase production, but they’re instead choosing to plow those profits into padding the pockets of executives and shareholders while House Republicans manufacture excuse after excuse to shield them from any accountability,” the White House said.

President Joe Biden has blasted oil companies and refiners for much of the last year for enjoying surging profits as petrol prices soared. In June, he wrote to executives of major oil refiners and complained they had cut back on production to pad profits, according to a copy of a letter seen by Reuters.

Exxon’s CFO Kathryn Mikells responded to growing criticism over the industry’s windfall profits and suggested the answer is not increased taxes.

“We look at the EU tax on the energy sector, and you know, it’s just unlawful and bad policy trying to tax something, when what you actually need is for it to increase,” Mikells said. “It has the opposite effect of what you’re trying to achieve.”

Exxon’s results for 2022 far exceeded the then-record US$45.2 billion net profit it reported in 2008, when oil hit US$142 per barrel, 30% above last year’s average price. Deep cost cuts during the Covid pandemic helped supercharge last year’s earnings.

“Overall earnings and cash flow were up pretty significantly year on year,” Mikells told Reuters. “So that came really from a combination of strong markets, strong throughput, strong production, and really good cost control.”

Exxon said it incurred a US$1.3 billion hit to its fourth-quarter earnings from a European Union windfall tax that began in the final quarter and from asset impairments. The company is suing the EU, arguing that the levy exceeds its legal authority.

Excluding charges, profit for the full year was US$59.1 billion. Production was up by about 100,000 barrels of oil and gas per day over a year ago to 3.8 million bpd. Adjusted per-share profit of US$3.40 beat consensus of US$3.29 per share, according to Refinitiv data.

Shares were up nearly 2% at US$115.63.

“It’s a headline beat,” Biraj Borkhataria from RBC Capital said in a note, despite lower chemical margins, lower-than- expected downstream gains and plans for higher maintenance works in refineries this quarter.

Exxon distributed US$30 billion in cash to shareholders last year, more than any of its Western rivals, and invested US$22.7 billion in the business.

Exxon said its cash flow from operations soared to US$76.8 billion last year, up from US$48.1 billion in 2021. And it decided to hold US$30 billion in cash balance. The company said it learned from the pandemic, when it found itself empty handed and raised debt to pay dividends to shareholders.

“Having a really strong balance sheet is a competitive advantage for us,“” Mikells said, adding that it allows the company to wait for potential acquisition opportunities and sustain its dividend program intact even if energy prices eventually fall.

Exxon posted US$12.8 billion in fourth-quarter net profit excluding charges, 44% more than the same period last year but down 35% from the previous quarter as oil prices eased and some operations suffered from cold-weather-related outages.

Exxon’s spending on new oil and gas projects bounced back last year to US$22.7 billion, up 37% from the prior year. The company increased outlays on discoveries in Guyana, in the top U.S. shale field, and on fuel refining and chemicals.

“The counter-cyclical investments we made before and during the pandemic provided the energy and products people needed as economies began recovering,” Exxon CEO Darren Woods said in a statement.

Investments can go up to US$25 billion this year, Woods said. Part of it is explained by rising costs in the Permian, with inflation in the double digits, amid “really, really hot” demand for equipments and services, he said.

Exxon’s results come ahead of what are expected to be strong earnings from Shell plc on Thursday and from BP plc and TotalEnergies next week. – Reuters


Spread the news
Advertisement

Kazzylen Web Analytics.


Kazzylen Analytics lets you measure your heatmap as well as track your Flash, video, and websites and applications & more. Register & get access to all Analystics on our website FREE
Previous articleIMF explains downgrades to Asean economic growth forecasts
Next articleUS consumer confidence slips on uncertain outlook: Survey

LEAVE A REPLY

Please enter your comment!
Please enter your name here