ExxonMobil Q2 Profits Fall 59%
The world’s biggest private oil and gas producer reported its worst quarterly financial result since at least 2012, but at least it was a positive number, unlike many of its peers. ExxonMobil earned $1.7bn, down 59% from last year’s $4.19bn, and down over $100mn on Q1 2016, its next worst. It blamed the result on low commodity prices and poor refining margins but it was helped by strong performance in the chemicals division.
CEO Rex Tillerson said: “While our financial results reflect a volatile industry environment, ExxonMobil remains focused on business fundamentals, cost discipline and advancing selective new investments across the value chain to extend our competitive advantage.”
Those “selective new investments” include its open-ended bid – $2.4bn minimum – for InterOil in Papua New Guinea; and Cyprus, where it has bid for an upstream block in this month’s licensing round. It is also close to a deal in Mozambique, according to reports. The latter two are with Qatar Petroleum.
It cut upstream capital expenditure from $6.7bn to $3.9bn compared with the same period last year. The US upstream spend took a $1bn hit.
ExxonMobil's US shale subsidiary, XTO (Credit: ExxonMobil)
Upstream earnings were $294mn while output was essentially unchanged at 4mn oil-equivalent barrels/day (boe/d). Liquids production growth from recent start-ups more than offset the impact of field decline and downtime events, notably in Canada and Nigeria. Gas output was down 3.6% at 9.762bn ft³, and lower liquids and gas realizations decreased earnings by $2.2bn.
It had good drilling results from Liza-2, the second well in the Stabroek block offshore Guyana. It said this was a “world-class discovery” with a recoverable resource between 800mn and 1.4bn boe.
Production started up at Alaska’s Point Thomson, the first company-operated project on the North Slope. At full rate production, the facility is designed to produce up to 10,000 barrels of natural gas condensate/day and 200mn ft³/day of gas, re-injected for future recovery.
William Powell