ExxonMobil Crashes to $20bn Q4 Loss
US major ExxonMobil lost $20.1bn on its Q4 2020 trading, it said February 2, compared with a $5.7bn gain in Q4 2019. Most of the losses were non-cash impairments and earnings excluding identified items – severance costs alone were $326mn – amounted to $110mn.
Its capital spending of $21bn was $2bn below budget and it secured a $3bn structural reduction on its operating expenses which it cut by more than 15% below 2019. It is planning another such reduction of $3bn on its operating expenses by 2023 assuming dated Brent crude averages $50/barrel.
Full-year 2020 capital spending of $21.4bn was nearly 35% lower than the initial $33bn plan, and $2bn below the revised plan, reflecting project pacing, increased efficiencies and lower market prices.
Oil-equivalent production in the fourth quarter was 3.7mn barrels/day. Excluding entitlement effects, divestments, and government mandates, liquids production rose 5% while natural gas rose 2%. Oil output was affected by host government curtailments. Natural gas sales were up 39% on Q3 2020 – although volumes were down 2% – reflecting market supply disruptions and seasonal demand.
CEO Darren Woods said the year had "presented the most challenging market conditions ExxonMobil has ever experienced.” But the pandemic notwithstanding, corporate initiatives and reorganisations "enabled us to respond decisively to permanently improve our cost structure, drive greater efficiencies across our businesses, and emerge a stronger company. These improvements are expected to deliver structural expense savings of $6bn per year by 2023, relative to 2019."