Latest market news

ExxonMobil total output down, Permian up 34pc: Update

  • : Chemicals, Crude oil, Natural gas
  • 21/07/30

Updates with details from conference call.

ExxonMobil's total second quarter production fell by 2pc to 3.6mn b/d of oil equivalent (boe/d) from the year-earlier quarter, mainly due to increased maintenance, but Permian basin output rose by 34pc to 400,000 b/d.

Excluding entitlement effects, divestments and government mandates, output rose by 3pc from a year earlier.

Volumes are expected to pick up in the current quarter because of lower maintenance, the company said in its earnings release today. ExxonMobil expects to boost spending on key projects including Guyana, Brazil, the Permian basin, as well as its chemical division, in the second half of 2021. Still, it anticipates full-year spending will be at the lower end of its guidance range of $16bn-$19bn.

"Positive momentum continued during the second quarter across all of our businesses as the global economic recovery increased demand for our products," chief executive Darren Woods said.

This is the company's first earnings report since it lost a proxy battle with a tiny hedge fund in May over its climate strategy that resulted in three board members being unseated. Woods was on the defensive again last month when he was forced to issue an apology after a company lobbyist was recorded saying ExxonMobil had campaigned against climate change legislation.

The new board met in person for the first time this week and Woods said ExxonMobil is "stepping up and accelerating efforts to ensure the company plays a meaningful role in the energy transition."

Although the company set up a low-carbon unit earlier this year — and Woods outlined a number of potential carbon capture projects — he emphasized that it would take time for these efforts to bear fruit.

He also downplayed the possibility of any sweeping changes in overall strategy, though there could be "accelerations, additional emphasis" in specific areas.

Unlike rival producer Chevron, which said earlier today it was resuming share buybacks that were suspended last year, the focus at ExxonMobil is squarely on using spare cash to pay down debt for the time being. The company reduced debt by $2.7bn in the quarter, bringing year-to-date reductions to more than $7bn. ExxonMobil also said it's on track to cut costs by $6bn through 2023.

The company reported a profit of $4.7bn compared with a loss of $1.1bn in the same period last year. Exxon Mobil's chemical business had its best quarter in the company's history with earnings of $2.3bn.

Earnings from chemicals were driven by higher polyethylene and polypropylene margins in North America and Europe, due to strong demand, tight supply and shipping constraints.


Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

24/09/18

Citgo auction result delayed amid last-minute motions

Citgo auction result delayed amid last-minute motions

Houston, 18 September (Argus) — The US court-appointed special master overseeing the auction of US refiner Citgo plans to object to a last-minute motion from the Venezuelan government to delay the sale process by four months. The Republic of Venezuela and state-owned oil company PdV filed a motion on Tuesday seeking a four-month pause in the sale of its refining subsidiary Citgo, which is being auctioned off to satisfy debts owed by PdV. Special master Robert Pincus said in a court filing today that he intends to object to Venezuela's motion for a pause. The last-minute motion from Venezuela comes days after the US District Court for the District of Delaware was expected to announce results of the winning bidder. The court asked for a second extension to the auction process in August, delaying announcing a successful bidder to on or about 16 September with a sale hearing on 7 November. But Pincus is now dealing with last-minute legal challenges filed last week outside of the Delaware courts by so-called "alter ego" claimants seeking to "circumvent" the Delaware court's sales process and "jump the line" for enforcing claims against PdV, the special master said in a filing last week. Bidders for Citgo's 804,000 b/d of refining capacity, terminals, retail fuel stations and other plants expect the assets to be sold free and clear of future claims by PdV creditors. Unresolved legal liabilities could lower the value bidders are willing to pay for Citgo, decreasing the pool of money available to those owed by PdV. By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US seeks to purchase 6mn bl for SPR


24/09/18
24/09/18

US seeks to purchase 6mn bl for SPR

Washington, 18 September (Argus) — President Joe Biden's administration is trying to purchase 6mn bl of sour crude for delivery to the US Strategic Petroleum Reserve (SPR) as part of a plan to issue solicitations when prices are "favorable for taxpayers." The US Department of Energy (DOE) today released a solicitation to purchase up to 6mn bl of sour crude for delivery in February-May to the SPR's Bayou Choctaw site in Louisiana. If the purchase is successful, it would be the largest single purchase since the Biden administration launched its crude purchase program in early 2023. The solicitation offers a chance for the administration to buy crude for the SPR at a lower price than earlier purchases. Nymex WTI crude futures for delivery in February settled at $68.41/bl on Tuesday. The lowest-priced crude purchase under Biden was a 1.7mn purchase at a price of $72/bl in June 2023, and the average purchase price is about $76/bl. Bids for the solicitation are due by noon ET on 25 September. DOE has already purchased more than 50mn bl of sour crude for the SPR, of which 30mn bl have already been delivered. On 9 September, DOE said it purchased 3.42mn bl of sour crude for the SPR's Bryan Mound storage site at a price of $72.46/bl from the trading firm Macquarie Commodities Trading. The crude will be delivered in January-March, adding to an earlier purchase of nearly 2.5mn bl that will be delivered to the Bryan Mound site over the same time frame. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US Fed cuts rate by half point, signals more to come


24/09/18
24/09/18

US Fed cuts rate by half point, signals more to come

Houston, 18 September (Argus) — The US Federal Reserve cut its target interest rate by 50 basis points today, the first rate cut since 2020, with officials signaling they expect to make another half point worth of cuts by the end of 2024. The Fed's Federal Open Market Committee (FOMC) lowered the federal funds rate to 4.75-5pc from the prior range of 5.25-5.5pc, which was a two-decade high. The Fed had kept the target rate unchanged since July 2023 after hiking it for more than a year in the most aggressive increase campaign in four decades to quash inflation, which peaked at 9.1pc in mid-2022. "The committee has gained greater confidence that inflation is moving sustainably toward 2pc and judges that the risks to achieving its employment and inflation goals are roughly in balance," the FOMC said in its statement after the two-day meeting. "Job gains have slowed, and the unemployment rate has moved up but remains low." The Fed board and policymakers, in their latest economic projections, expect the target rate range will end 2024 near a midpoint of 4.4pc compared with an end of year midpoint of 5.1pc projected in June, which implies further cuts amounting to 50 basis points by the end of 2024. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Dutch government eyes gas storage levy from 2026


24/09/18
24/09/18

Dutch government eyes gas storage levy from 2026

London, 18 September (Argus) — The Dutch government has proposed a new levy from 2026 to recoup the cost of filling the Bergermeer gas storage facility since 2022 in its 2025 budget plan. The government's draft budget presented on Tuesday said that preparations were ongoing to introduce a levy on booked capacity on top of gas system operator GTS' transport tariffs. The levy would apply to both domestic users and "users abroad" to ensure that "the costs associated with the gas storage filling measures are borne by the users who benefit from the filling of storages", the government said. The levy is expected to generate €146.7mn/yr ($163mn/yr) from 2026 until at least 2029, according to the draft budget. That phrasing suggests that the levy may not take effect before 2026. The government tasked state-owned holding company EBN with filling Bergermeer to 90pc of capacity in summer 2022 if market participants failed to do so, and has left that legal requirement in place until 2025. And the Dutch government's draft budget earmarks more money for the stockbuild in coming years, amounting to about €256mn for 2025 and €233mn for 2026, up from €67mn in 2023 and €105mn in 2024. The Hague's new coalition government has focussed on gas security of supply, proposing further steps to support domestic production and ensure that storages are filled. As part of this, it intends to propose legislation to prevent and react to an energy supply crisis, while aiming to reduce demand, maintain LNG capacity and focus on long-term contracts, the government said. The government also plans to amend the mining act, the gas act and other existing laws to "structurally safeguard the security of gas supply", it said. In its government programme released on Friday , the cabinet said it was examining how the government could more proactively ensure the gas stockfill. All the country's storage sites remain "crucial for guaranteeing security of supply and realising energy independence", the budget said. This includes the country's largest storage site at Norg, where the government compensates operator Nam — a 50:50 joint venture between Shell and ExxonMobil — to use the facility to ensure security of supply . The government has paid Nam €491mn for that this year, down from €757mn a year earlier, because of lower gas prices, the budget shows. The German government implemented a similar storage levy in 2022 to recoup the cost of filling storage sites ahead of the winter heating season. But after EU pressure from central and eastern European neighbours regarding the large negative impacts of the levy on their effort to diversify away from Russian gas, the German government decided to stop charging the levy on outbound flows from the beginning of next year. By Lucas Waelbroeck Boix and Till Stehr Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

TMX is a fossil fuel subsidy of at least C$8.7bn: IISD


24/09/18
24/09/18

TMX is a fossil fuel subsidy of at least C$8.7bn: IISD

Calgary, 18 September (Argus) — Canada's newest crude pipeline to the country's west coast amounts to a fossil fuel subsidy of at least C$8.7bn ($6.4bn), a research and policy think-tank said. The federal government is unlikely to recover its C$34bn investment to construct the 590,000 b/d Trans Mountain Expansion (TMX) connecting oil producers in Alberta to the Pacific coast, qualifying the project as a major subsidy for the fossil fuel industry, according to the International Institute for Sustainable Development (IISD) on Wednesday. This runs contrary to the government's policy to eliminate direct support for the oil and gas sector , a goal Justin Trudeau's Liberals said was achieved in 2023. The government was the first G20 country to hit this milestone, following a 2009 commitment by the group to reach the goal by 2025. The subsidy as it relates to TMX could be as high as C$18.7bn, the Canadian non-profit said, but noted the entire amount could still be recovered by increasing tolls and/or implementing a levy. This levy could be against either all producers, or all shippers, of crude in the Western Canadian Sedimentary Basin (WCSB), whether they use TMX or not, the IISD suggested. About 90pc of Canada's crude production comes from western Canada, with much of that derived from Alberta's oil sands region. "A levy in the range of C$1-2/bl . . . over a 10-year period would be sufficient to recover the entire cost of the subsidy and the loss to the Canadian taxpayer," according to the IISD. Alternatively, fixed tolls on TMX would need to be more than doubled to C$24.53/bl from C$11.37/bl to recover all capital costs for the line that went into service on 1 May this year, according to IISD's figures. Variable tolls would be added to this. The terms in the original contracts signed between shippers and then-owner Kinder Morgan were no longer appropriate as they did not reflect the rising risks of the project, said the IISD. Kinder Morgan suspended the project in 2018, which led to the Canadian government buying both the expansion project and the original 300,000 b/d Trans Mountain line from US midstream company that same year. The federal government has maintained its plan to sell the pipeline once operational, but the final tolls are yet to be determined. Whether the operator or shippers will bear the brunt of the massive cost overruns is also still unknown. Tolls, representing cash flows for any prospective buyer, will help dictate the price that the expanded Trans Mountain system will fetch. The IISD suggests a sale price is likely to be between C$17.6bn-26.6bn, resulting in a net loss to the government of between C$8.9bn-18bn assuming its cost of investment climbs to nearly C$36bn before a sale is reached. But despite warnings by opponents it would go underused, TMX has been as advertised, opening a new frontier for oil sands operators and disrupting trade flows throughout the Pacific Rim. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more