American oil company ExxonMobil reported Tuesday a profit of $23 billion in 2021 and Q4 earning of $8.9 billion owing to the recovery of oil prices throughout last year. In addition, the company stated that it generated $48 billion in cash flow from operating activities – the highest in 10 years – and reduced its debt levels down to pre-pandemic levels by paying down $20 billion.
ExxonMobil said that capital and exploration expenditures were $5.8 billion and $16.6 billion in the fourth quarter and the full year, respectively. In comparison, it managed to grow its total savings to $5 billion compared to 2019 and is on pace to exceed annual structural cost reductions of $6 billion in the next year.
According to the statement, the firm’s previously announced buyback program has also been in progress since the beginning of this year for a cost of up to $10 billion over two years. Additionally, the company anticipates corporate spending to be in the range of $21 billion to $24 billion for 2022.
Darren Woods, chairman and chief executive officer of ExxonMobil, said that their effective pandemic response, focused investments during the down cycle, and structural cost savings positioned them to realise the full benefits of the market recovery in 2021.
On Monday, the company also announced its restructuring plans, essentially transforming the business into three divisions: upstream, production solutions and low-carbon solutions. The restructuring will be effective April 1.
Commenting on this, Woods said: “Aligning our businesses along market-focused value chains and centralising service delivery, provides the flexibility to ensure our most capable resources are applied to the highest corporate priorities and positions us to deliver greater shareholder returns.”
“Our new streamlined business structure is another example of the actions we are taking to further strengthen our competitive advantages and grow shareholder value,” he added.
Meanwhile, ExxonMobil’s statement disclosed that production volumes in the Permian basin increased nearly 100,000 barrels of oil equivalent per day in 2021, while “it plans to raise production in the US shale basin by 25% in 2022,” Woods said, according to a report by S&P Global Platts. Average realisations for crude oil and natural gas increased 8% and 63% from Q3, respectively.
Refining throughput was up by 2% from Q3 and the highest since 2013, enabling the company to capitalise on improved industry margins. ExxonMobil disclosed an adjusted profit of $2.05 per share, 11 cents above analysts’ forecast, as the bottom line benefited from soaring oil and gas prices, higher volumes and asset sales, Reuters reported.
The company also announced its plan to achieve net-zero emissions from operating costs by 2050, which applies to Scope 1 and 2 greenhouse gas emissions, and builds on its 2030 emission-reduction plan. The statement expanded upon the company’s approach to identifying greenhouse gas emission-reduction opportunities, and the investment and future policy requirements necessary to achieve net-zero.
