By Lucy Adautin
The US oil production helped ExxonMobil and Chevron bag their second-biggest annual profits in a decade despite slide in prices that tempered earnings from the records hit in 2022.
America’s oil supermajors yielded output quickly in their own backyard in 2023, doubling down on oil and gas that has prompted blowback over their commitment to cutting emissions.
Exxon posted full-year net income of $36bn, down from $55.7bn the previous year, but otherwise its biggest since 2012.
Chevron’s net income of $21.4bn was down from $35.5bn the previous year, but otherwise its strongest since 2013.
Exxon’s chief financial officer Kathryn Mikells hailed a “great end to a great year”. Shares in Chevron were up 1.4 per cent in pre-market trading in New York, while Exxon rose 0.4 per cent.
High commodity prices in the wake of Russia’s full-scale invasion of Ukraine pushed oil and gas companies globally to record profits in 2022 before receding last year.
Both US supermajors increased domestic production in 2023, contributing to a boom in American output that took the market by surprise and helped keep a lid on prices even as the Opec+ group of oil exporters implemented substantial production cuts.
The US pumped 13.3mn barrels of oil a day in November, the last month for which data is available from the Energy Information Administration, more than any country in history.
Major production growth has focused on the sprawling Permian Basin, which stretches across Texas and New Mexico.
Exxon said combined 2023 output in the Permian and Guyana — where it has a stake in the biggest oil discovery of the past decade — was up 18 per cent. Its overall US oil output rose to 851,000 barrels a day during the quarter from 789,000 b/d a year ago. Chevron increased its Permian production by 10 per cent in 2023, despite struggles with the productivity of ageing wells in the oilfield earlier in the year. It produced 1.16mn b/d in the US in the quarter versus 895,000 b/d previously, boosted in part by its acquisistion of PDC Energy.
Chevron’s chief financial officer Pierre Breber said, “We had a strong quarter and it was really led by record production in the Permian,” . “There’s always things that are happening — it’s a big business — but we delivered on the plan.”
Exxon and Chevron have committed to increasing oil and gas production even as some of their European rivals shift to renewable sources such as wind and solar. Both companies in October announced mega deals to acquire rivals, which are being reviewed by US regulators.
Exxon’s acquisition of Pioneer Natural Resources and Chevron’s purchase of Hess signify significant moves within the energy sector, particularly in the Permian for $60bn and other key regions like Guyana and the Bakken shale.
However, Chevron’s decision not to sign up to a decarbonization charter at COP28 and its exclusion from a UN-led methane reporting program, contrasting with Exxon’s participation, have drawn attention to differences in their approaches to climate issues. This divergence highlights ongoing debates within the industry about environmental responsibility and sustainability.
Breber dismissed the criticism, pointing to the company’s investment in low-carbon businesses such as biofuels, green hydrogen and carbon capture. “We’ll get assessed on the results,” he said.