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    Energy, chemicals demand propel Exxon to Q2 profit

Summary

The US major is keeping its capex at the low end of the range, despite a strong start to the year,

by: William Powell

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Energy, chemicals demand propel Exxon to Q2 profit

US major ExxonMobil turned a $1.1bn Q2 2020 loss into a $4.6bn profit a year later, thanks to strong oil and natural gas demand and its best-ever quarterly chemical and lubricants result. At $2.3bn, earnings from chemicals were half the total profit and the best ever in the company's history. Upstream earnings of $3.2bn were up from a loss of $1.6bn in Q2 2020.

At $588mn, corporate and finance costs were about two thirds of last year's $872mn as financing costs and taxes were lower.

“We’re realising significant benefits from an improved cost structure, solid operating performance and low-cost-of-supply investments that, together, are generating attractive returns and strong cash flow to fund our capital programme, pay the dividend and reduce debt," said CEO Darren Woods July 30.

The sale of its $1.15bn Santoprene chemicals business to Celanese, due to close late this year subject to approvals, will help fund its Brazilian Bacalhau development and its further successes upstream off Guyana.

But it will also spend on chemicals and in the US upstream, in the Permian. Full-year spending will however still be at the lower end of the guidance range of $16bn-$19bn, of which $7bn only was spent in the first half.

Oil-equivalent production in the second quarter was 3.6mn barrels/day, down 2% year on year, owing partly to higher maintenance this year, deferred from last year. Excluding entitlement effects, divestments, and government mandates, oil-equivalent production increased 3%, including growth in the Permian and Guyana. Gas production was up at 8.2bn ft³/d from 8bn ft³/d, with gains in the US, Australia and the Asia-Pacific regions more than offsetting the fall in Canada and Australia-Oceania.