Exxon Feels Refining Pinch

US major ExxonMobil reported October 28 a 3Q 2016 profit of $2.7bn, down $1.6bn, or 38%, from the same period in 2015. It said the results reflected lower refining margins – mainly in refining – which collectively knocked $1.6bn off earnings; and lower commodity prices.

Natural gas production was 9.6bn ft³/day, up 77mn ft³/d from 2015 as project start-ups more than offset field decline and divestment impacts. Upstream earnings were $620mn. Volumes for the quarter declined 3% to 3.8mn barrels of oil equivalent/day compared with a year ago, owing to unplanned downtime, primarily in Nigeria, and field declines partially offset by increased production from recent project start-ups.

US upstream earnings declined $35mn from the third quarter of 2015 to a loss of $477mn in the third quarter of 2016. Non-US upstream earnings were $1.1bn, down $703mn from the prior year.

ExxonMobil is hoping to increase the value of its Papua New Guinea LNG plant, making an offer worth more than $2.5bn for the outstanding shares of InterOil, which owns licences in Papua New Guinea covering about four million acres. The transaction is pending the outcome of an appeal by shareholder Phil Mulacek, founder of InterOil, against the court decision approving it. The final price paid will depend on the size of the reserves declared. 

PNG LNG site

(Credit: ExxonMobil)

In Guyana, the Liza-3 appraisal well was successfully completed in October, confirming a world-class resource discovery in excess of 1bn boe. ExxonMobil said.

ExxonMobil and Saudi Basic Industries Corporation (Sabic) are considering joint development of a petrochemical complex on the coast of Texas or Louisiana and run on gas as feedstock.

William Powell