Exxon and Chevron discussed merging to former second-largest oil company

ExxonMobil logo- Credit:Игорь Головнёв  AdobeStock

Top U.S. oil producer ExxonMobil on Tuesday posted its first annual loss as a public company as the COVID-19 pandemic hammered energy prices and it reduced the value of its shale gas properties by more than $20 billion in the fourth quarter.

The company, born in 1999 from the merger of Exxon and Mobil, lost USA $ 22.4 billion for the year as a whole, compared to $ 14.3 billion in 2019.

Its announcement reflected that of another oil heavyweight - BP - which posted a profit of 825 million dollars (£603 million) in the fourth quarter but still lost 18.1 billion dollars (£13.24 billion) in 2020.

Tan Sri Wan Zulkiflee Wan Ariffin, the former president and group chief executive officer of Malaysia's national oil company, is now on the board of directors of United States oil giant Exxon Mobil.

"Energy consumption collapsed as economies shut down, oil prices hit their lowest point in history, and refining margins fell well below their 10-year lows", said Exxon CEO Darren Woods.

Exxon yesterday announced that it would invest US$3 billion on lower emission solutions through 2025 and created a business that will focus on commercialising its carbon capture technology. It expects by 2023 to cut 6 billion dollars (£4.39 billion) in annual spending compared with 2019 levels.

Revenue and other income fell 31% to $46.54 billion, almost in line with Wall Street's consensus estimate of $46.55 billion.

Exxon said Tuesday that fourth-quarter oil-equivalent production was 3.7 million barrels a day.

The agency - one of the three most influential ratings firms in the world - said it could ultimately downgrade the ratings of Chevron, Exxon, Shell and Total among others.

The energy giant unveiled new cost-cutting efforts, a new low-carbon business unit and a new board member that it said would position it for the future. Exxon is also in the crosshairs of hedge fund D.E. Shaw, which is pressuring the company to cut costs and improve performance. "We strengthened our finances - taking out costs and closing major divestments".

Exxon has an equity share in about one-fifth of global Carbon dioxide capture capacity and has captured approximately 40 percent of all the captured anthropogenic Carbon dioxide in the world, the company's website states. However, the company is still bringing new oil and gas projects into operation. It is Engine No. 1, not Engine 1.



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