HOUSTON, Jan 31 (Reuters) – Exxon Mobil Corp (XOM.N) posted net profit of $56 billion for 2022, the company said on Tuesday, grossing around $6.3 million per hour last year and setting not just a corporate record, but a historical record for the Western oil industry.
The oil majors are expected to break their own annual records of high prices and rising demand, bringing their combined take to nearly $200 billion. The scale has renewed criticism of the oil industry and prompted calls for more countries to levy taxes on windfall corporate profits.
Exxon’s results far exceeded the then-record net profit of $45.2 billion reported in 2008, when oil hit $142 a barrel, 30% above last year’s average price. Sharp cost reductions during the pandemic helped boost earnings last year.
“Overall earnings and cash flow have increased quite significantly year over year,” Exxon chief financial officer Kathryn Mikells told Reuters. “So it really comes from a combination of strong markets, high throughput, strong production and very good cost control.”
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Exxon said it suffered a $1.3 billion decline in fourth-quarter earnings due to a European Union windfall tax that began last quarter and asset write-downs. The company is suing the EU, arguing that the levy exceeds its legal authority.
Excluding charges, profit for the full year was $59.1 billion. Production rose by about 100,000 barrels of oil and gas per day a year ago to 3.8 million bpd. Adjusted earnings per share of $3.40 beat consensus of $3.29 per share, according to Refinitiv data.
Shares rose about 1% to $114.70.
“That’s a big headline,” RBC Capital’s Biraj Borkhataria said in a note, despite lower chemical margins, lower-than-expected downstream earnings and plans for more extensive maintenance work at refineries this quarter. .
ABUNDANT TAXES
The results could trigger another showdown with the White House. On Friday, President Joe Biden’s administration slammed oil companies for pouring money into shareholder payouts rather than production. Exxon distributed $30 billion in cash to shareholders last year, more than any of its Western rivals.
Windfall taxes are “an illegal and wrong policy,” Mikells countered. Imposing new taxes on oil revenues “has the opposite effect of what you’re trying to achieve”, she said, adding that it would discourage new oil and gas production.
Exxon boasted that its cash flow from operations soared to $76.8 billion last year from $48.1 billion in 2021. And it decided to hold $30 billion in balance of Treasury. The company said it learned from the pandemic, when it found itself empty-handed and took on debt to pay dividends to shareholders.
“Having a very strong balance sheet is a competitive advantage for us,” Mikells said, adding that it allows the company to wait for potential acquisition opportunities and keep its dividend program intact even as oil prices rise. energy eventually drop.
Exxon reported net income before charges of $12.8 billion in the fourth quarter, 44% higher than the same period last year, but down 35% from the previous quarter, prices of lower oil prices and some operations suffered from cold weather outages.
PROJECT EXPENSES
Exxon’s spending on new oil and gas projects rebounded last year to $22.7 billion, up 37% from a year earlier. The company increased spending on discoveries in Guyana, the main US shale field, as well as on fuel refining and chemicals.
“The countercyclical investments we made before and during the pandemic provided the energy and products people needed as economies began to recover,” Exxon Chief Executive Darren Woods said in a statement. communicated.
Investments can reach $25 billion this year, Woods said. Part of the reason is rising costs in the Permian, with double-digit inflation, amid “really, really hot” demand for equipment and services, he said.
Exxon has guided Permian production this year to 600,000 bpd, up 50,000 bpd from last year but slightly below market expectations. On the other hand, Woods forecast strong refining margins to continue into 2023.
Exxon’s results come ahead of what should be strong results from Shell plc on Thursday and BP plc and TotalEnergies next 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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