ExxonMobil has reported a $36 billion profit for 2023 due to strong performance in fuel trading and increased production of oil and gas.
The past year has been challenging for oil majors, with profits down by about a third from record levels in 2022. This was due to a decline in oil and gas prices after a spike caused by Russia’s invasion of Ukraine.
ExxonMobil Chief Executive Darren Woods said the industry “saw energy prices and refining margins start to normalize in 2023.”
The company has increased its spending target after a 4% increase in capital spending in the last quarter of 2023 compared to the previous year. ExxonMobil’s capital expenditures for 2023 were $26.32 billion.
Woods also highlighted the company’s strategic investments in its two core oil production areas, the US Permian Basin and Guyana. ExxonMobil has begun production of lithium to supply batteries for electric vehicles.
According to Peter McNally, Global Sector Lead for Industrial Materials and Energy at Third Bridge, ExxonMobil closed 2023 on a strong note and enters 2024 in a strong financial position. However, investors will be closely watching the company’s acquisition of Pioneer Natural Resources, which is expected to close in the second quarter.
ExxonMobil’s results for the year also included a $2.5 billion impairment charge for California properties that have been on the market for over a year. Excluding this charge, the company’s annual income fell by 35% to $38.57 billion.
ExxonMobil’s trading division also played a significant role in its fourth-quarter results, delivering a $1.1 billion boost to operating profit from its fuel business.
According to Chief Financial Officer Kathryn Mikells, the company’s decision to combine global trading into a single division has been successful. She also stated that this is something they expect to see on an ongoing basis in their results.
ExxonMobil exceeded its $9 billion cost-cutting target in 2019 by $700 million. The company distributed $32 billion to shareholders through buybacks and dividends, an increase from $29.8 billion in the previous year.
The US company has announced plans for $23 billion to $25 billion in capital spending this year to prepare for future projects in 2025.
