Search

Exxon and Chevron profits soar on surging oil and gas prices - Financial Times

Profits at US oil supermajors ExxonMobil and Chevron soared to multiyear highs in the third quarter, as surging crude and gas prices buoyed their finances amid scrutiny over their clean energy strategies.

Chevron on Friday reported net income of $6.1bn, its highest quarterly profit since the first quarter of 2013 and well above Wall Street estimates for $4.1bn, according to data compiled by S&P Global Market Intelligence. ExxonMobil’s $6.8bn profit was its highest level since late 2017.

“We had another strong quarter. Highest earnings in over eight years, highest free cash flow in the company’s history, higher even than the strongest quarters more than a decade ago when oil prices were well above $100,” Pierre Breber, Chevron’s chief financial officer, told the Financial Times. “We’re a better company than we were pre-Covid.”

Crude prices have climbed to more than $80 a barrel in recent months and natural gas prices have hit record highs in many parts of the world. It is a dramatic reversal from last year, when a deep downturn devastated the industry’s finances.

Both companies said they remained focused on paying down debt and returning cash to shareholders, rather than accelerating spending to lift output.

Officials of president Joe Biden’s administration have pushed some in the industry to increase production to help ease fuel prices at the pump, the highest in years.

Breber said Chevron’s oil and gas output was up 7 per cent from last year and that “we’ll see higher capital” expenditure next year. The company said it was sticking by previously announced spending plans of between $15bn and $17bn for next year even as prices have soared.

The rise in prices “feels more cyclical than structural”, Breber said. “We had rapid demand decreases last year, followed by rapid increases this year, and it’s hard for supply to adjust as quickly as demand and it does appear that supply is lagging.”

ExxonMobil increased its quarterly dividend from $0.87 a share to $0.88, the first increase since 2019. It said it planned to restart large-scale stock buybacks next year, repurchasing as much as $10bn in shares over a 12- to 24-month period.

The surge in profits from higher fossil fuel prices came a day after the companies’ chief executives, along with the US bosses of BP and Shell, were grilled by US lawmakers over allegations the companies had waged a decades-long disinformation campaign to hide threats from climate change.

The US supermajors are also under scrutiny from some shareholders who argue they are not moving fast enough to build up their low-carbon businesses, leaving themselves at risk if the world shifts rapidly to clean energy.

Darren Woods, Exxon’s chief executive, said high earnings from oil and gas would “provide the near-term cash flows to fund lower-carbon opportunities”.

Woods told analysts the company would maintain planned capital spending of between $20bn and $25bn a year, but that “a much larger share” would be put towards the company’s “Low Carbon Solutions business and emission reduction efforts”.

He said Exxon would spend about $15bn on efforts to reduce emissions from its operations and on low-carbon projects, such as carbon capture and storage, between 2022 and 2027.

For Exxon, the bumper quarter came just months after it lost a high-profile proxy fight with activist hedge fund Engine No 1 over its preparation for a future of lower-carbon fuels. The fund’s nominees clinched three seats on Exxon’s board of directors.

Chevron’s shares were 1.1 per cent higher in early-afternoon New York trade, while Exxon’s stock was flat.

Adblock test (Why?)

Article From & Read More ( Exxon and Chevron profits soar on surging oil and gas prices - Financial Times )
https://ift.tt/3BrBIEV
Business

Bagikan Berita Ini

0 Response to "Exxon and Chevron profits soar on surging oil and gas prices - Financial Times"

Post a Comment

Powered by Blogger.