On Tuesday, Exxon Mobil signalled in a security filing that its first-quarter operating profits dropped about 25% from last year’s record levels as oil and gas prices dropped, Reuters reports.
An Exxon Mobil report predicted that operating results could drop to approximately $9.6bn, compared with a record $12.8bn in last year’s fourth quarter.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
The decline could have been driven by the exploration business, Exxon said, signalling that operating results from pumping oil and gas would by approximately $5.2bn, down from the $8.2bn seen in the fourth quarter of 2022.
Profits from refining oil into gasoline, diesel and other fuel products dropped to about $3.6bn due to higher maintenance costs and reduced margins, Exxon’s filing indicated.
The company’s chemicals business fell flat compared with the fourth quarter, producing approximately $300m in operating profit. Earnings from motor oils fell to around $500m from $800m in last year’s fourth quarter.
Low-carbon potential
Dan Ammann, an Exxon chief executive, told investors on Tuesday that the company’s new low-carbon business could one day be more lucrative than its fossil fuel production, the Financial Timesreports.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataHe added that the company expects to profit from carbon-cutting technologies even as it expands its oil and gas output, adding that the low-carbon business could eventually be worth “hundreds of billions of dollars” and might grow to be “larger than Exxon Mobil’s base business today as the world approaches net-zero”.
Despite this, Exxon said it plans to spend around $17bn on low-carbon business for the next three year, until the end of 2025. This represents just 10% of what it aims to spend on fossil fuel projects over the same period.
Global oil prices have fallen since last year by around 7% to an average $82 per barrel, while US gas prices also feel by more than half in this year’s first quarter compared to the last. Global oil prices were trading on Tuesday at around $85 per barrel.
However, drops in prices and profits could be temporary. Analysts are expecting oil prices to rise again, possibly up to $100 per barrel, after OPEC+ announced production cuts on Sunday.
