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Monday, March 27, 2023

Exxon Mobil reports $8.9 billion fourth-quarter profit as oil prices soar.

HOUSTON — Exxon Mobil, the largest American oil company, reported its fourth consecutive quarter of rising profit on Tuesday as it rode a wave of climbing oil and natural gas prices.

Heralding its financial comeback after several years of mediocre returns, the company announced that it would resume buybacks of $10 billion of stock over the next two years, the first repurchasing of shares since 2016.

Exxon said it made $8.9 billion in the three months that ended in December on revenue of $84.9 billion. The quarterly profit was the highest since 2014 and compared with $6.8 billion in the third quarter. For the year, Exxon earned $23 billion, compared with a loss of $22.4 billion in 2020 when oil and gas prices plummeted because of the economic slowdown caused by the pandemic.

The company’s success, however, was largely due to a recovery of oil prices throughout 2021, as demand for energy rebounded.

By the end of the fourth quarter, the price of West Texas Intermediate crude, the American benchmark, had risen by more than 50 percent, reaching an average of $67 a barrel in December. Oil prices have continued to climb to more than $80 a barrel because of tightening supplies and tensions between Russia and Ukraine. Natural gas prices rose by more than 40 percent from 2020 in the quarter, and have picked up again in recent weeks as temperatures have dropped in many regions.

“We’ve made great progress in 2021, and our forward plans position us to lead in cash flow and earnings growth, operating performance and the energy transition,” said Darren Woods, Exxon’s chief executive.

The company reported that it had increased its production of oil and gas by 2 percent from 2020, largely because of increased production in the Permian basin that straddles Texas and New Mexico, and off the coast of Guyana in South America. It also reported improved margins in its refining business, despite the continued slump in jet fuel demand.

Still, Exxon’s stock price remains below its levels of a decade ago. In response to mediocre returns, investors have pressured Exxon and other oil companies to control spending and improve shareholder returns with dividends and stock buybacks.

The company last month said that it would spend $20 billion to $25 billion a year on investments through 2027, a decrease of up to 33 percent from spending plans before the pandemic sent oil prices spiraling down in 2020.

The company on Monday announced that it was streamlining its businesses, combining its chemical, refining and marketing businesses and management of its technology and engineering units to save more than $6 billion over the next two years in comparison with 2019 spending. The company will move its headquarters to a Houston suburb where most operations are already centered on a 385-acre campus, from Irving, Texas.

On Tuesday, Mr. Woods said the new structure would “further strengthen our competitive advantages.”

World Nation News Desk
World Nation News Deskhttps://worldnationnews.com/
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