Saturday, December 3, 2022

Exxon reports $ 22 billion annual loss

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ExxonMobil fell to its first annual loss, capping a year of crisis for a US titanic company in which it cut jobs and expenses, lost its place in the Dow Jones Industrial Average and was hit by a growing battle of shareholders by proxy.

America’s largest oil producer reported a loss of $ 22 billion in 2020, down from profits of more than $ 14 billion the year before, after posting a fourth-quarter write-down of $ 19.3 billion on assets in North America and Argentina.

“The past year has presented the most difficult market conditions ExxonMobil has ever seen,” said Darren Woods, CEO of Exxon.

Revenue fell to $ 182 billion, the lowest level since 2002. The company also posted its fourth consecutive quarter in the red, with a loss of $ 20 billion from profit of $ 5.7 billion at the same period in 2019.

Despite the financial blow, Exxon maintained its quarterly dividend of $ 0.87 per share. The group’s shares rose more than 2 percent on the pre-market.

The profits of Exxon, as well as those of the American rival Chevron and the United Kingdom BP in recent days, have highlighted the extent of damage to Big Oil from the pandemic, which caused demand and prices to collapse last year. Exxon and Chevron have even discussed a possible merger after prices fell in March, according to recent reports.

ConocoPhillips also reported a hefty loss of $ 2.7 billion on Tuesday – much worse than analysts’ expectations and down from a profit of $ 7.2 billion last year.

Exxon also appointed a new board member on Tuesday as part of “its ongoing refresh process,” and said the board would take “further short-term action.”

The appointment of Tan Sri Wan Zulkiflee Wan Ariffin, former head of Malaysian state oil group Petronas, comes amid a sustained campaign by activist investors for Exxon to cut costs and revise a strategy that is focused on increasing oil and gas supply.

Last week, hedge fund Engine No 1 officially appointed four new directors to Exxon’s board of directors.

“A board that has dramatically underperformed and defied shareholder sentiment for so long has failed to earn the right to choose its own new members or bow to calls for change,” said No.1. 1 after Tuesday’s results.

Exxon has taken several milestones in response to pressure from activists in recent weeks, including one commitment to cut the carbon emissions of its upstream production activity by 30% by 2025.

On Monday, he announced that he would spend $ 3 billion in five years net on a new low-carbon business unit primarily focused on advancing carbon capture and storage technologies, and identified more than 20 new sites to develop.

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