Exxon breaks earnings record for western oil majors with $56 billion profit for 2022

exxon mobil Posted profits of $56 billion for 2022, the company said Tuesday, up from nearly $6.3 million an hour last year, and setting not only a company record but a historic high for the western oil industry.

Oil majors are expected to smash their own annual records due to higher prices and rising demand, bringing their total cost to around $200 billion. The scale has sparked renewed criticism of the oil industry and calls for more countries to impose windfall tax on companies.

Exxon’s results far exceeded the then-record $45.2 billion net profit reported in 2008, when oil peaked at $142 a barrel, a 30% increase from the previous year’s average price. Deep cost-cutting during the pandemic helped supercharge last year’s earnings.

“Total earnings and cash flow grew significantly year-over-year,” Exxon Chief Financial Officer Katherine Michaels told Reuters. “So it came from a combination of really strong markets, strong throughput, strong production and really good cost controls.”

Exxon said it took a $1.3 billion hit to its fourth-quarter earnings from an EU windfall tax that began last quarter and from asset impairments. The company is suing the European Union, arguing that the levy exceeds its legal authority.

Excluding charges, full year profit was $59.1 billion. Oil and gas production rose by about 100,000 barrels per day to 3.8 million bpd from a year earlier. Earnings per share of $3.40 were adjusted against the consensus estimate of $3.29 per share, according to data from Refinitiv.

Shares fell 1.5% to $111.88 in pre-market trading.

unexpected tax

The results could set up another confrontation with the White House. The administration of President Joe Biden criticized oil companies on Friday for pouring cash into shareholder payments instead of production.

Exxon claimed that its cash flow from operations grew to $76.8 billion last year, up from $48.1 billion in 2021.

Windfall profits taxes are “illegal and bad policy”, Mickels opposed. He said imposing new taxes on oil earnings “has the opposite effect of what you’re trying to achieve,” adding that it would discourage new oil and gas production.

Exxon posted $14 billion in fourth-quarter profit excluding charges, up 60% from the same period last year but down nearly 25% from the previous quarter as oil prices eased and some operations were frozen. -suffered from weather-related outages.

project cost

Exxon’s spending on new oil and gas projects bounced back last year to $22.7 billion, up 37% from the previous year. The company increased outlays on discoveries in Guyana, the top US shale field, and on fuel refining and chemicals.

“The counter-cyclical investments we made before and during the pandemic provided energy and products as the economy began to recover,” Exxon Chief Executive Officer Darren Woods said in a statement.

Its results have come ahead of those who are expected to earn strong oysters from Thursday BP And total energy next week.