Big Oil Companies Finished 2018 Strong Despite Plunge in Oil Prices
01 Febrero 2019 - 08:54AM
Noticias Dow Jones
By Bradley Olson
HOUSTON -- The world's largest Western oil companies shrugged
off a plunge in oil prices in the final months of 2018 and posted
some of their biggest annual profits in years.
The strong fourth-quarter earnings Friday by Exxon Mobil Corp.
and Chevron Corp., following similar results by Royal Dutch Shell
PLC Thursday, demonstrated that the big oil companies are seeing
benefits from a more disciplined strategy focused on returns and
profitability over growing production.
The companies have restructured their businesses, sold off
assets and positioned themselves to thrive even when crude prices
swing up and down wildly.
Global crude prices fell 38% at the end of the fourth quarter,
but Exxon still generated $6 billion in net income in the period --
lower than the year before, which was boosted by the U.S. tax
overhaul, but still better than analysts had expected. Chevron said
net income was $3.7 billion, up 19% from the period a year ago.
Both companies substantially increased U.S. shale production in
the booming Permian Basin in West Texas and New Mexico.
Even with global crude prices averaging about $71 a barrel last
year, about a third lower than in 2014, the five biggest companies
including Exxon, Chevron, Shell, BP PLC and France's Total SA are
on track to post combined annual profits of about $84 billion, 13%
higher than four years ago, when oil sold for more than $100 a
barrel before falling, according to FactSet data.
"These companies have figured out how to operate in this new
environment, and they have adjusted well" to lower prices, said
Brian Youngberg, an analyst at Edward Jones in St. Louis. "The key
going forward will be maintaining discipline. This is now a
low-growth industry, so you've got to invest well."
Shares of Exxon and Chevron rose in premarket trading
Friday.
Production at Exxon rose above 4 million barrels a day of oil
and gas for the first time since early 2017. On Thursday, Shell
said it nearly doubled profits in 2018 from the previous year,
posting net income of about $23 billion.
Exxon recorded a $429 million impairment charge in the quarter.
Total revenue and other income rose 8.1% to $72 billion. The
company announced Thursday that it would reorganize its drilling
and production business into three new companies, effective in
April.
Total revenue at Chevron rose 13% to $42 billion, and production
of oil and gas rose 7% to the equivalent of 2.93 million barrels a
day. Excluding asset sales, the company said it expects production
to grow by 4% to 7% in 2019. Chevron also had a $270 million
write-off in the quarter.
Allison Prang and Kimberly Chin contributed to this article.
Write to Bradley Olson at Bradley.Olson@wsj.com
(END) Dow Jones Newswires
February 01, 2019 09:39 ET (14:39 GMT)
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