Some of the biggest oil companies including BP Plc, TotalEnergies and Exxon Mobil have reported record profits on the heels of surging commodity prices, which have skyrocketed amid rapid demand recovery and threatened supply.
On 2 August, British oil major BP reported a whopping $8.45 billion of second-quarter adjusted net income — its highest in 14 years. Thanks to strong refining margins and trading, BP has also hiked its dividend by 10% and accelerated share buybacks amid increased spending on new oil and gas production.
“The company is running well and it continues to strengthen. We have real strategic momentum,” BP CEO Bernard Looney said in a statement.
According to Looney, the company is fulfilling world’s energy needs while also investing to accelerate the energy transition.
Oil giant Exxon Mobil Corp also reported record-breaking earnings for the second quarter, exceeding analysts’ estimates, but warned consumers that global energy supplies will remain tight and expensive for the foreseeable future.
French oil major TotalEnergies joined its peers in reporting a surge in profits with adjusted net income tripling from the past year to $9.8 billion. Despite record-breaking profits, TotalEnergies’ shares fell as its stock buyback pans disappointed some analysts and investors.
The company reported second-quarter adjusted earnings of $4.14 per share, beating the $3.98 forecast by the Bloomberg Consensus. The oil major recorded $17.9 billion of net income, surpassing the previous record set in 2008.
Big Oil meeting energy needs
During the past months, Big Oil CEOs have faced increasing criticism for collecting profits at the expense of consumers who continue facing pain at the pump. In their defence, company leaders have repeatedly pointed towards their contribution to meet energy needs.
Chevron CEO Mike Wirth recently said in a statement that his company is increasing energy supplies to help meet the challenges facing global markets and at the same time “doubled investment compared to last year to grow both traditional and new energy business lines.”
Over the past year, Benchmark Brent futures surged more than 140% and averaged around $114 per barrel during the second quarter, boosting profits of American and European oil majors.
Second-quarter profits of U.S. shale companies including Devon Energy Corp, Diamondback Energy Inc, and Pioneer Natural Resources also surpassed estimates.
Additionally, both Devon and Diamondback announced higher production forecasts. Oklahoma-based Devon said it expects production to average 600,000 to 610,000 barrels of oil equivalent per day (boepd) this year, up from its previous forecast of 570,000 to 600,000 boepd, due to better-than-expected well performance and its purchase of Williston Basin assets.
US shale producer Diamondback expects to pump between 374,000 and 380,000 boepd this year, compared with a previous range of 369,000 to 376,000 boepd.