Downtime Hits Exxon Q2 Profits
US supermajor ExxonMobil reported Q2 2018 profit of $4bn, up from $3.4bn in the same period last year 2017. CEO Darren Woods said the results were "primarily impacted by significant scheduled maintenance undertaken to support operational integrity. In addition, while we were pleased with the return of full production following the PNG earthquake, extended recoveries from first quarter operational incidents in the downstream were disappointing. However, good progress was made during the second quarter in fully recovering from these incidents."
Cash flow from operations and asset sales was $8.1bn, including proceeds associated with asset sales of $307mn. Capital and exploration expenditures were $6.6bn, up 69%, reflecting key investments in Brazil, the US Permian Basin and Indonesia.
Gas output was down, from 9.9bn ft³/d to 8.6bn ft³/d. Excluding entitlement effects and divestments, more liquids production in the Permian and Bakken in the US and Hebron in Canada more than offset decline and higher downtime driven by scheduled maintenance.
Natural gas volumes were impacted by lower seasonal demand in Europe, deliberate near-term shifting of investments in US unconventionals from gas to liquids and downtime in LNG operations, notably in Qatar. Asia and the US both lost just under 500mn ft³/d production, while in Europe it was down 300mn ft³/d. Production at Papua New Guinea returned to normal operations in April and reached record daily LNG production rates in June. Second quarter volume loss associated with the earthquake recovery was 17,000 oil-equivalent barrels/day.
“Key projects in Guyana, the US Permian Basin, Brazil, Mozambique and Papua New Guinea are positioning us well to meet the objectives we outlined in our long-term earnings growth plans. The high quality of these resources, combined with our strengths in project execution and innovation, will generate strong value over time,” said Woods.
Qatar Petroleum agreed to partner with ExxonMobil by acquiring a 30% interest in two ExxonMobil affiliates, ExxonMobil Exploration Argentina and Mobil Argentina, which hold interests in the Vaca Muerta unconventional shale oil and gas plays in Neuquen. This agreement expands the successful partnership with Qatar Petroleum, and underscores the commitment to develop Argentina’s resources to further support domestic production, it said.
ExxonMobil and Eni announced that marketing efforts are underway for the Rovuma LNG project, which will produce, liquefy and sell natural gas from the Area 4 block offshore Mozambique. The company is in active negotiations on binding sales and purchase agreements for Rovuma LNG.