NEW YORK (AFP) – ExxonMobil and Chevron reported profits on Friday that were much lower than last year’s due a drop in commodity prices, but still lofty enough to enable increased shareholder distributions.
The two United States (US) oil giants joined European rivals Shell and Total in seeing steep declines in their bottom-line results compared with the heady year-ago period when the war in Ukraine sent crude and natural gas prices sky bound.
ExxonMobil reported profits of USD7.9 billion, down 56 per cent on a 28-per-cent drop in revenues to USD82.9 billion.
Chevron reported profits of USD6.0 billion, down 48 per cent, while revenues declined 28 per cent to USD48.9 billion.
US crude prices in the second quarter of 2023 were down more than 30 per cent compared with the year-ago period, which was dominated by worries about the loss of Russian crude supply.
Natural gas prices are also down sharply following a mild winter, while the comparative weakness in refinery margins reflects sluggish economic conditions in some key markets.
ExxonMobil Chief Executive Darren Woods told CNBC that today’s commodity prices were more in line with historic norms, adding “we’re still in a fairly constructive market or positive market”, with commodities either in line or above historic averages. Woods also described demand as “pretty robust”.
The oil giants raised capital spending somewhat in response to the windfall over the last year, but have also emphasised returning cash to shareholders. In the second quarter, ExxonMobil spent USD8 billion on share repurchases and dividends, five per cent above the year-ago period.
Chevron spent USD7.2 billion to shareholders, up 37 per cent, an increase highlighted in its earnings press release.
“Our quarterly financial results remain strong, and we returned record cash to shareholders,” said Chief Executive Mike Wirth.
Although below the blowout profits of the year-ago period, the results still enabled ExxonMobil to score USD19.3 billion in profits for the first half of 2023 and Chevron USD12.6 billion.