ExxonMobil posted record profits of $55.7bn last year, accounting for the fallout from Big Oil after Russia’s invasion of Ukraine despite a fourth-quarter decline as fossil fuel prices retreated from their highs.
The Texas-based oil supermajor ended the year with fourth-quarter profit of $12.75bn, missing Wall Street expectations of $13.7bn, according to analyst estimates compiled by S&P Capital IQ.
The company also took a $1.3bn charge related to wind taxes in Europe. ExxonMobil sued the European Union over the levy, arguing that the bloc had exceeded its legal authority.
Although the fourth quarter was one of the company’s most profitable on record, it was down sharply from the record $19.7bn earned in the third quarter, a sign that Big Oil’s earnings growth is slowing as oil and gas prices fall. from near record levels last summer.
Darren Woods, the chief executive, said that the company “benefited from a profitable market” and considered the investments made by the company during the pandemic, even though the industry suffered heavy losses, because it helped to generate “operating and financial results that are superior in the industry and returns to shareholders. in 2022”.
Chevron, Exxon’s rival in the US, reported its own record earnings for 2022 of $35.5bn on Friday, making the combined income of America’s oil titans last year a record high of more than $91bn, surpassing the previous peak of $71bn in 2012.
Mammoth earnings, share buybacks and dividend payments in the US oil and gas industry have drawn fire from US president Joe Biden, who has accused Exxon and others of “war profiteering” while consumers suffer high energy costs.
Kathy Mikells, Exxon’s chief financial officer, told the Financial Times that the company’s “first and most important priority is to invest in our business to meet demand”, noting that the group’s overall production rose last year “at a time when it was very much needed”.
Exxon said that last year’s capital and exploration expenditure had reached $22.7bn and that it had raised output by more than 30 per cent in two high-growth areas, offshore Guyana and the Permian oil fields in Texas and New Mexico. It also says it has produced more fuel than any refinery in North America.
In December, Exxon said it planned to spend $50bn on share buybacks between 2022 and 2024, including $35bn this year and next.
The big shareholder payout has fueled a rally in Exxon’s stock price, which is up about 50 percent over the past year, outpacing rival Big Oil and beating the broader S&P 500’s 11 percent decline over the period.
Oil prices have rallied over the past month on investor expectations that the opening of China’s economy will accelerate crude oil demand growth while sanctions on Russia weigh on global supply. Brent crude traded above $83 a barrel on Tuesday morning, down from $75 in December.
Mikells said he expected prices to remain “volatile” with “recessionary concerns” hanging over the market, but China’s opening could “give a little bit of uplift” to the oil market.