ExxonMobil Income Sinks On Weak Downstream
US major ExxonMobil saw profits slump 21% yr/yr in the second quarter as a result of increased maintenance and weaker margins in its downstream and chemicals segment.
Net income totalled $3.13bn in the three-month period, down from $3.95bn a year earlier, as revenues fell to $69bn from $73.5bn.
Upstream earnings were up 7.3% yr/yr at $3.26bn, with growth driven by a 7% climb in production to 3.9mn boe/day, and a $487mn gain from a tax cut in Alberta, Canada. These factors more than offset higher levels of maintenance, increased exploration spending and weaker prices.
In contrast to these gains, downstream earnings plunged to $451mn in April to June from $724mn a year earlier. Exxon blamed this decline on increased downtime and maintenance, slimmed margins and higher operating costs.
Chemicals fared even worse, with earnings totalling just $188mn versus $890mn a year earlier, owing to maintenance and margin pressure.
Exxon’s output growth came largely on the back of rising oil yields from the US Permian basin, with total liquids up 8% at 2.39mn boe/day. Gas extraction also climbed 5%, however, arriving at 9.12bn ft3/day.
“We continue to make significant progress toward delivering our long-term growth plans,” ExxonMobil chairman Darren Woods commented, pointing to the Permian output growth and the company's US Gulf Coast steam cracker launched last year, which is currently exceeding its design capacity by 10%. He said preparations were underway for the start-up of the Liza Phase 1 development in Guyana early next year, where ExxonMobil is targeting over 6bn boe of hydrocarbons, mostly oil.