Profits at US supermajors ExxonMobil and Chevron soared to multiyear highs in the third quarter as surging oil and gas prices buoyed their finances amid scrutiny over their clean energy strategies.
Chevron on Friday reported net income of $6.1bn, its highest quarterly profit since the first quarter of 2013 and well above Wall Street estimates for $4.1bn, according to data compiled by S&P Global Market Intelligence. ExxonMobil’s $6.8bn profit was its highest since late 2017.
“We had another strong quarter. Highest earnings in over eight years, highest free cash flow in the company’s history, higher even than the strongest quarters more than a decade ago when oil prices were well above $100,” Pierre Breber, Chevron’s chief financial officer, told the Financial Times. “We’re a better company than we were pre-Covid.”
Crude prices have surged to more than $80 a barrel in recent months and natural gas price have hit record highs around the world. It is a dramatic reversal from last year, when a deep downturn devastated the industry’s finances.
Both companies said they remained focused on paying down debt and returning cash to shareholders rather than accelerating spending to lift output.
Officials of Joe Biden’s administration have pushed some in the industry to increase production to help ease the surge in prices at the pump, where US consumers are paying the highest prices in years.
Breber said Chevron’s output was up 7 per cent from last year and that “we’ll see higher capital” spending next year. The company said it was sticking by its previously announced spending plans even as prices have soared.
The rise in prices “feels more cyclical than structural,” said Breber. “We had rapid demand decreases last year, followed by rapid increases this year, and it’s hard for supply to adjust as quickly as demand and it does appear that supply is lagging.”
ExxonMobil increased its quarterly dividend from $0.87 a share to $0.88, the first increase since 2019. It said it planned to launch a share buyback scheme of up to $10bn next year.
The surge in profits from higher fossil fuel prices came a day after the companies’ chief executives, along with the US bosses of BP and Shell, were grilled by US lawmakers over allegations the companies had waged a decades-long disinformation campaign to hide the threat from climate change.
The US supermajors are also under scrutiny from some shareholders who argue they are not moving fast enough to build up their low-carbon businesses, leaving themselves at risk if the world shifts rapidly to clean energy.
Darren Woods, Exxon’s chief executive, said high earnings from oil and gas would “provide the near-term cash flows to fund lower-carbon opportunities”.
For Exxon, the bumper quarter came just months after it lost a high-profile fight with activist hedge fund Engine No 1, which cost it three seats on its board of directors.
Exxon and Chevron profits soar on surging oil and gas prices - Financial Times
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