Pharaonic gains for ExxonMobil and Chevron as crude oil soars

published on Friday, July 29, 2022 at 19:38

US hydrocarbon giants ExxonMobil and Chevron, in the crosshairs of the Biden administration, which has accused them of failing to make enough efforts to limit the rise in prices at the pump, posted record second-quarter profits.

With crude oil prices soaring above $100 following Russia’s invasion of Ukraine and hefty refining margins, ExxonMobil made $17.9 billion and Chevron $11.6 billion over the period.

Not only the American majors benefit from the situation: in Europe, Shell made a net profit of 18 billion dollars, TotalEnergies 5.7 billion and Eni 3.8 billion.

A barrel of black gold listed in New York traded between around $95 and $120 over the period. It rose for over a year on recovering business and consumer demand and was catapulted in the spring with sanctions against Russia following the invasion of Ukraine to levels not seen since 2008.

This increase is a major contributor to inflation, which is at its highest level in several decades in either the United States or Europe.

The US government regularly criticizes industry companies for making money off the backs of motorists without bothering to solve the problem, with President Joe Biden even joking in early June that ExxonMobil would “make more money” in the second become as God”. Quarter.

ExxonMobil and Chevron say they are making efforts.

On the production side, ExxonMobil notes that it pumped about 130,000 barrels of oil equivalent per day more into the Permian Basin between Texas and New Mexico during the quarter, while Chevron’s in-country rose 3%.

And ExxonMobil says its refining capacity will increase by about 250,000 barrels per day in the first quarter of 2023, “representing the largest capacity expansion in the industry in the United States since 2012,” its CEO Darren Woods said in a statement.

– spoiled shareholders –

On the refinery side, the situation is more mixed.

ExxonMobil’s US processed volumes increased slightly, while Chevron’s processed volumes fell 8% due to maintenance.

Both companies benefited from sharp increases in refined product prices that boosted their margins, increases in crude oil production and cost controls.

ExxonMobil and Chevron, which suffered heavy losses early in the Covid-19 pandemic, do not specifically plan to take advantage of the new financial windfall to increase their investments more than expected this year, which remain at lower levels in the previous period Pandemic.

On the other hand, they’re using it to deleverage and pamper their shareholders: ExxonMobil paid them a total of $7.6 billion in the quarter, while Chevron increased its high-range, $10 billion to $15 billion stock repurchase program for the year.

ExxonMobil’s stock took more than 3% on Wall Street’s first exchanges, and Chevron’s stock more than 7%.

The majors prefer not to borrow too much to better weather the next economic downturn. They have also been trying for several years to respond to growing calls from civil society and some shareholders for a shift towards less carbon-generating energies in the fight against climate change.

Kaddouri Ismail

I am Ismail from Morocco, I work as a blogger and online marketer. I am also the founder of the “Mofid” site, in which I constantly publish many important articles in the field of technology, taking advantage of more than 5 years of experience working in the field. I focus on publishing in a group of areas, the most important of which are programming, e-marketing, digital currencies and freelance work.

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