A Chevron refinery in El Segundo (California), January 26, 2022 (AFP/Archives/Patrick T. FALLON)
Profits of US oil and gas giants ExxonMobil and Chevron were hit in the first quarter by reduced margins in refining and a drop in natural gas prices.
“Profits declined because refining margins and natural gas prices declined from last year’s highs to a 10-year average,” ExxonMobil said.
In the United States, natural gas prices have fallen by 32% over one year.
Between January and March, the Spring (Texas) group recorded a turnover of 83.08 billion dollars (-4% over one year) and a net profit of 8.22 billion (-28.1%) , which is lower than the consensus of Factset analysts. Other elements also weighed on its performance, but to a lesser extent.
Conversely, ExxonMobil benefited from “larger” volumes thanks to its activities in Guyana and the expansion of its Beaumont (Texas) refinery.
Combined with structural cost reductions, this made it possible to offset, among other things, the drop in volumes due to disposals and higher maintenance expenses.
The fall in profit “was a little more severe than expected,” noted Peter McNally, analyst at Third Bridge, acknowledging that natural gas prices had “collapsed.”
Conversely, he highlighted more dynamic oil production than among his competitors, thanks to the “boom” in Guyana.
This new Eldorado of fossil fuels is also at the heart of a dispute involving ExxonMobil and Chevron in particular, which is the subject of arbitration proceedings.
The object of desire is more precisely the immense Stabroek Block oil field, off the coast of Guyana.
– Eldorado of black gold –
It belongs to ExxonMobil (45%), the Chinese company Cnooc (25%) and the American group Hess (30%). Anyone can refuse the acquisition of the field by a third party.
However, Chevron announced at the end of 2023 the acquisition of Hess for $53 billion, being particularly motivated by its share in Stabroek. He indicated at the end of February that he could give up Hess, if he was refused by the other two.
“We have asked the court to hear the arguments in the third quarter, for a decision in the fourth quarter,” said Mike Wirth, CEO of Chevron, during an audio conference with analysts devoted to the first quarter results.
An ExxonMobil refinery in Notre-Dame-de-Gravenchon (northwest of France), May 23, 2016 (AFP/Archives/CHARLY TRIBALLEAU)
“We see no legitimate reason to delay this timetable which corresponds to Exxon’s position,” he stressed, specifying that this would allow the acquisition of Hess to be finalized “shortly thereafter”, depending on the outcome. of arbitration.
“If the decision goes against Chevron, we believe the rationale for the merger (with Hess) will dissipate considerably,” commented CFRA analyst Stewart Glickman.
Unlike ExxonMobil which did not meet analysts’ expectations, Chevron announced Friday morning results for the first quarter in line with consensus while being down year-on-year.
For the same reasons as its Texan competitor: the drop in refinery margins and natural gas prices. And, just like ExxonMobil, the increase in production volumes partially offset it.
The San Ramon (California) group achieved a turnover of 48.72 billion dollars, compared to 50.79 billion a year earlier. Its net profit fell to 5.50 billion, compared to 6.57 billion in the first quarter of 2023.
Production in Kazakhstan was also satisfactory, helping to partially offset planned downtime in Nigeria.
Chevron explains that, during the quarter, it made the final decision to increase its infrastructure to increase the extraction capacity of the Tamar natural gas field in Israel, that it withdrew from non-operational assets in Burma on April 1 and that it entered into an agreement to acquire a 60% stake in an AREA OFF-1 offshore exploration block in Uruguay.
He is not the only one to have had a big appetite in 2023: ExxonMobil launched the takeover of Pioneer Natural Resources, for around $60 billion, which it still hopes will be finalized in the second quarter.
This operation should strengthen it in shale oil and gas.
Pioneer shareholders gave the green light to the merger on February 7, said CEO Darren Woods, who reported “constructive” discussions with the US Antitrust Authority (FTC), during a separate audio conference with analysts.
“We are very confident that the operation will not create anti-competitive problems,” he continued, referring to the potential for “significant synergies” with this union.
At the close of the New York Stock Exchange, ExxonMobil shares lost 2.78% and Chevron shares gained 0.37%.
© 2024 AFP
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