MOSCOW (MRC) -- ExxonMobil Corp has signaled a return to annual profit for 2021 as stronger oil and gas prices drove a gain of up to USD1.9 B in operating profits that exceeded one-time charges, reported Reuters.
The largest US oil producer issued a snapshot of final quarter results that showed it expects sequentially higher profit from oil and gas production. Operating profits in refining and chemicals will be flat to lower, a securities filing showed. Official results are due out Feb. 1.
In 2020, Exxon suffered a historic USD22.4 B loss on writedowns from falling oil prices and lower refining margins. Cost cuts coupled with energy price gains have allowed it to pay down debt and plot a share buyback program next year.
Analysts forecast an adjusted profit of USD1.76 per share for the quarter, according to Refinitiv IBES data, compared to 3 cents a share excluding writedowns a year-ago.
The regulatory filing signaled one-time charges for asset impairments and contractual costs could lower oil and gas earnings by up to USD1.2 B. It did not provide details on the production assets affected.
Exxon also said lower margins in chemicals could lower results by USD600 MM-USD800 MM, compared to the USD2.14 B third-quarter chemicals profit. Refining margins could stay flat or drop by USD200 MM compared to the USD1.23 B profit the previous quarter.
Offsetting the negative impacts, Exxon signaled mark-to-market gains of up to USD1.1 B for oil and gas and in refined products. It also said proceeds from asset sales including its U.K. North Sea assets could deliver up to USD500 MM.
The rosier outlook allowed Exxon to extend planned a USD20-25 B per year outlay on new projects through 2027, including USD2.5 B per year on carbon reductions, the company has said, adding it expects to double its pre-pandemic annual profit by 2025, the company has said. About 60% of its spending will be in key growth areas of US shale, Guyana, Brazil, LNG, and chemical products.
As MRC informed before, ExxonMobil said on Dec. 27, its Baytown, Texas, refinery continued to operate at reduced rates following a fire on Dec. 23, and that the unit involved remained shut down. The company has not yet determined the cause of the fire, but said it was continuing to empty the unit so it could safely enter the facility and assess what impact it would have on production. A filing with the Texas Commission on Environmental Quality said the fire occurred at the facility's hydro desulfurization unit 1.
Exxon's Baytown facility is home to a chemical plant, an olefins plant and the country's fourth-biggest oil refinery, with capacity to process 560,500 bpd of crude.
Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,265,290 tonnes in the first eleven months of 2021, up by 14% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,363,850 tonnes in January-November, 2021, up by 25% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding PP random copolymers decreased significantly.
ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world's oil and about 2% of the world's energy.