Profits at US oil majors ExxonMobil and Chevron fall sharply

US oil major ExxonMobil’s profit fell by more than 35 percent last year to 36 billion dollars (823.6 billion Kč). The company said so today in its earnings report. The result still beat analysts’ estimates. The No. 2 player in the US market, Chevron, also reported a sharp year-on-year decline in profit.

Analysts expected major oil companies’ profits for last year to be around a third lower than the record level of the previous year. Oil and gas prices had fallen from the peaks they reached after Russia’s military invasion of Ukraine.

Chevron’s profit fell by almost 40 percent last year to 21.4 billion dollars. The company’s profits from oil production and processing dropped sharply. However, the company announced it would increase its dividend by eight percent. Last year, it returned a record 26.3 billion dollars to shareholders through dividends and share buybacks.

Last year, Exxon returned around 32 billion dollars to shareholders through share buybacks and dividends. That was 29.8 billion dollars more than a year earlier.

In the fourth quarter alone, Exxon’s profit fell by more than 40 percent to 7.6 billion dollars. Chevron’s profit for the same period plunged by more than 64 percent to 2.26 billion dollars.

The average price of North Sea Brent crude in the fourth quarter was 82.85 dollars per barrel. That represents a year-on-year decline of seven percent and a four percent drop from the previous quarter.

Leading oil producers are writing down some assets and cleaning up their balance sheets ahead of expected transactions. Chevron said it would write down about four billion dollars in the fourth quarter, while its British rival Shell reported write-downs of 5.5 billion dollars.

Last October, Exxon agreed to acquire rival Pioneer Natural Resources to strengthen its shale oil production in the Permian Basin, a vast oil field in the southwestern United States. Chevron then proposed acquiring Hess to gain a foothold in Guyana. Both transactions are expected to close in the middle of this year.