an Exxon gas station in Washington on March 13, 2022 (AFP/Archives/Stefani Reynolds)
The American hydrocarbon giants ExxonMobil and Chevron, in the crosshairs of the Biden administration which accuses them of not making enough efforts to limit the surge in prices at the pump, generated record profits in the second quarter.
With crude oil prices rising to over $100 in the wake of Russia’s invasion of Ukraine, and juicy refinery margins, ExxonMobil earned $17.9 billion over the period and Chevron $11.6 billion.
The American majors are not the only ones to take advantage of the situation: in Europe, Shell posted a net profit of 18 billion dollars, TotalEnergies 5.7 billion and Eni 3.8 billion.
A barrel of black gold listed in New York traded over the period between approximately 95 and 120 dollars. Rising for more than a year due to the rebound in demand from businesses and consumers, it was catapulted to levels not seen since 2008 in the spring with the sanctions imposed on Russia after the invasion of Ukraine.
This surge contributes largely to inflation, at its highest for several decades in the United States or in Europe.
The US government regularly criticizes companies in the sector for enriching themselves on the backs of motorists without bothering to try to solve the problem, with President Joe Biden even joking in early June that ExxonMobil was going to “earn more money than God” in the second quarter.
ExxonMobil and Chevron claim to be making efforts.
On the production side, ExxonMobil points out that it pumped around 130,000 barrels of oil equivalent per day more over the quarter in the Permian Basin, straddling Texas and New Mexico, while that of Chevron increased by 3% in the country.
And ExxonMobil says its refining capacity will increase by about 250,000 barrels per day in the first quarter of 2023, “which represents the largest capacity addition in the industry in the United States since 2012”, underlined its CEO Darren Woods in a statement.
– Spoiled shareholders –
On the refinery side, the situation is more mixed.
The volumes processed by ExxonMobil in the United States rose slightly, but those processed by Chevron fell by 8% due to maintenance operations.
In general, ExxonMobil’s turnover increased by 71% to reach nearly 115.7 billion, and that of Chevron by 83% to 69 billion.
Both companies benefited from the sharp rise in the price of refined products, which boosted their margins, from the increase in crude production and from controlling their expenses.
ExxonMobil and Chevron, which suffered heavy losses at the start of the Covid-19 pandemic, do not specifically plan to use the new financial windfall to increase their capital expenditures this year more than expected, which remain at lower levels. in the period before the pandemic.
On the other hand, they take advantage of it to reduce their level of indebtedness, and spoil their shareholders: ExxonMobil paid them 7.6 billion dollars in total over the quarter while Chevron increased, from 10 to 15 billion dollars, the high range. of its share buyback program for the year.
The action of ExxonMobil took more than 3% in the first exchanges on Wall Street, that of Chevron more than 7%.
The majors prefer not to go into too much debt to better face the next economic downturns. They have also been trying for several years to adjust to the growing calls from civil society and some shareholders for a reorientation towards less carbon-producing energies to fight against climate change.
© 2022 AFP
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