Exxon Mobil on Tuesday reported its fourth consecutive quarterly loss on Tuesday as the pandemic continued to weigh on energy demand and oil and natural gas prices.
In the worst year for the company in four decades, Exxon said it lost $22.4 billion in 2020, compared with a profit of $14.3 billion in 2019. A big chunk of the company’s losses came from $19.3 billion in write-downs in the last three months of the year as the company marked down the value of U.S. natural gas fields acquired when gas prices were far higher before fracking flooded the market a decade ago.
Exxon sharply cut spending on exploration and production by $21.4 billion, or 35 percent, last year because of the pandemic.
“The past year presented the most challenging market conditions Exxon Mobil has ever experienced,” said Darren W. Woods, the company’s chairman and chief executive. He added that the company ended the year as “a stronger company” with a “flexible capital program that is robust to a range of market scenarios and focused on our highest-return opportunities.”
There were some signs of recovery in the fourth quarter. Excluding its write-downs, Exxon made a small profit of $110 million in the quarter as commodity prices began to recover.
Exxon’s large chemical business earned $691 million, its best quarterly result since 2018. Oil production in the Permian basin straddling Texas and New Mexico increased by 42 percent in the quarter compared with the fourth quarter of 2019. After a slow start in 2019, oil production in the deep waters off the coast of Guyana ramped up to 120,000 barrels a day and is expected to increase significantly over the next five years.
Early in 2020, there were persistent concern among investors that the company would cut its dividend, but as oil prices surged above $50 a barrel in recent weeks, those fears have subsided. The company’s stock price has recovered by roughly 40 percent since November. Exxon was up about 2 percent in early trading on Tuesday.
Under pressure to show progress on curbing emissions, the company said on Monday that it was creating a new business called Low Carbon Solutions to develop carbon capture and sequestration projects around the world.
The company is expected to reorganize its board in the coming months and on Tuesday announced the election of a new member, Tan Sri Wan Zulkiflee Wan Ariffin, a former president of the Malaysian oil company Petronas.
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