HOUSTON, Jan 31 (Reuters) – Exxon Mobil Corp ( XOM.N ) posted a net profit of $56 billion for 2022, the company said on Tuesday, after earning about $6.3 million an hour last year and not just a company record. , but also a historic high for the Western oil industry.
Major oil companies are expected to break their own annual records on higher prices and rising demand, pushing their combined revenues closer to $200 billion. The scale has renewed criticism of the oil industry and prompted calls in more countries to tax companies on windfall profits.
Exxon’s results far surpassed the then-record net profit of $45.2 billion it reported in 2008, when oil hit $142 a barrel, 30% higher than last year’s average price. Deep cost-cutting during the pandemic helped boost last year’s revenue.
Exxon’s Chief Financial Officer Kathryn Mikells told Reuters that “gross profit and cash flow have grown quite significantly year over year.” “So it came from a combination of really strong markets, strong productivity, strong production and really good cost control.”
Latest Updates
See 2 more stories
Exxon said a $1.3 billion hit to fourth-quarter earnings from a European Union income tax windfall and asset impairment charges that kicked in last quarter. The company is suing the EU, arguing that the levy exceeds its legal powers.
Excluding expenses, profit for the full year was $59.1 billion. Production increased by nearly 100,000 barrels of oil and gas to 3.8 million barrels a day compared to a year ago. Adjusted earnings per share of $3.40 beat the consensus of $3.29 per share, according to Refinitiv data.
Shares rose about 1% to $114.70.
“It’s a headline hit,” said RBC Capital’s Biraj Borkhataria, despite lower chemical margins, lower-than-expected stream earnings and higher refinery maintenance plans this quarter.
DUTIES TAXES
The results could spark another confrontation with the White House. On Friday, President Joe Biden’s administration criticized oil companies for pouring cash into shareholder payments rather than production. Exxon distributed $30 billion in cash to shareholders last year, more than its Western rivals.
Future profits taxes are “illegal and bad policy,” Mikells said. New taxes on oil revenues “have the opposite effect of what you’re trying to achieve,” he said, adding that it would discourage new oil and gas production.
Exxon boasted that its cash from operations rose last year to $76.8 billion from $48.1 billion in 2021. And he decided to keep a cash balance of $30 billion. The company said it learned from the pandemic when it found itself empty-handed and had to raise 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 anticipate potential acquisition opportunities and maintain its dividend program even if energy prices eventually fall.
Exxon reported net income of $12.8 billion in the fourth quarter, excluding charges, up 44% from the same period last year, but down 35% from the previous quarter as lower oil prices and some operations suffered from cold weather-related outages. .
PROJECT COSTS
Exxon’s spending on new oil and gas projects rose 37% last year to $22.7 billion. The company has increased spending on exploration, fuel refining and chemicals in Guyana, the largest shale field in the United States.
“The countercyclical investments we made before and during the pandemic provided the energy and products people needed as economies began to recover,” Exxon CEO Darren Woods said in a statement.
According to Woods, investments could increase to 25 billion dollars this year. Part of that is due to rising costs in the Permian with double-digit inflation amid “really, really hot” demand for equipment and services.
Exxon raised Permian production to 600,000 barrels per day this year, up 50,000 barrels from last year but slightly below market expectations. On the other hand, Woods predicted that strong processing margins will continue into 2023.
Exxon’s results come ahead of expected strong earnings from Shell plc on Thursday and from BP plc and TotalEnergies next week.
Reporting by Sabrina Valle in Houston; Additional reporting by Mrinalika Roy in Bengaluru; Edited by Christian Schmollinger and Mark Porter
Our standards: Thomson Reuters Trust Principles.