- POSTED: 31 Jan 2014 00:37
US oil giant ExxonMobil on Thursday said fourth-quarter earnings sagged under a drop in oil and gas production and major declines in its international refining and chemical businesses.
NEW YORK: US oil giant ExxonMobil on Thursday said fourth-quarter earnings sagged under a drop in oil and gas production and major declines in its international refining and chemical businesses.
Driving the 1.8 percent decline in oil and gas output was a slower-than-expected ramp-up of the Kearl Canadian oilsands project and a months-long outage at the massive Kashagan field in Kazakstan due to pipeline problems, said Exxon vice president David Rosenthal.
Fourth-quarter earnings came in at $8.4 billion, down 16.1 percent from the year-ago profit of $10 billion, the largest US energy company said.
Earnings of $1.91 per share missed analyst estimates by a penny.
Revenues fell to $110.9 billion in the quarter, well below market expectations, from $114.7 billion in the 2012 fourth quarter.
Rosenthal declined to give targets at Kearl or Kashagan, where an investigation is ongoing. But he said Exxon would not undertake projects that raise volumes but have low profitability.
Exxon has been working to improve fiscal terms with host governments and generally steer "human and financial capabilities" to projects with "above-average incremental profitability."
To that end, the company recently let lapse a contract in Abu Dhabi that had been expected to add 140,000 barrels a day in 2014 and beyond, Rosenthal said in a conference call with analysts.
Analysts have also raised questions about the impact of a recent order by the Dutch government to curtail output at the Groningen field due to concerns about earth tremors. Rosenthal said the profitability at the Dutch field was "in the bottom half of our portfolio."
Thursday's results renewed questions about Exxon's target to boost output from 4.2 million barrels a day in 2013 to 4.8 million in 2017.
Rosenthal said the company would update its production forecast at an analyst meeting in March.
The other big weaknesses were foreign refining, where earnings tumbled 70 percent to $319 million, and international chemicals, where profits fell 56 percent to $102 million.
Rosenthal said "sluggish" economic growth in Asia Pacific and Europe impeded refining, while Asian chemicals was further hit by a spate of new chemicals capacity added in recent years.
"Those are weak markets compared to the US and Canada without question," Rosenthal said.
By contrast, US chemicals is enjoying "top-of-the-cycle business conditions," Rosenthal said. Earnings for the segment rose 11 percent to $808 million.
For full-year 2013, ExxonMobil reported net income of $32.6 billion, down 27.4 percent from 2012 profits of $44.9 billion. Earnings were $7.37 per share, or three cents below analyst forecasts.
Revenues fell nine percent to $438.3 billion, down from $480.7 billion in 2012.
The 2013 annual results were hit by a drop of $8.6 billion in gains from divestitures compared with 2012.
Shares in Dow member Exxon fell 0.9 percent to $94.22 in early-afternoon trade on the New York Stock Exchange.