Despite decreased profitability US oil corporations raise shareholder dividends.
IN NEW YORK:
Due to the worldwide decrease in commodity prices, two US oil companies, ExxonMobil and Chevron, declared earnings on Friday that were much lower than in years past but increased shareholder distributions.
The US oil giants saw huge decreases in their bottom line results compared to the euphoric year-ago time when Russia’s invasion of Ukraine pushed crude and natural gas prices sky-high, joining European competitors Shell and Total in this regard. For More Information….
ExxonMobil recorded earnings of 7.9 billion Dollars down 56% on sales of 82.9 billion Dollars down 28% according to the specifics according to AFP.
While Chevron reported earnings of 6.0 billion Dollars a 48% fall and sales of 48.9 billion Dollars a 28% decline.
In the second quarter of 2023 more than 30% US oil prices fell compared to the same time the last year because of worries about the loss of Russian crude supplies.
Following a mild winter, natural gas prices have also fallen significantly, and the relative weakness in refinery margins reflects slow economic circumstances in certain important markets.
Today’s commodity prices according to ExxonMobil Chief Executive Darren Woods are more in line with historical norms. He also said that “we’re still in a fairly constructive market or positive market,” with commodities either above or at par with historical averages.
Demand was also characterized by Woods as “pretty robust.”
Giving stockholders cash
In reaction to the windfall during the last year, the oil companies increased capital investment considerably but also placed an emphasis on returning cash to shareholders.
ExxonMobil spent 8 billion Dollars or 5% more than in the same quarter last year on share repurchases and dividends.
Chevron reported a 37% increase in its dividend payout, spending $7.2 billion on shareholders.
“Our quarterly financial results remain strong, and we returned record cash to shareholders,” CEO Mike Wirth stated.
The results allowed Exxon Mobil to earn 19.3 billion Dollars in earnings for the first half of 2023 and Chevron 12.6 billion Dollars albeit being below the record breaking profits of the prior year period.
A recent batch of results was labeled by the environmental NGO 350.org as “another obscene profit… made at the expense of people and the planet.” Those in the gathering demanded a “renewable energy revolution.”
Officials like President Joe Biden,
who has often urged oil corporations to direct extra revenue into new production rather than shareholder rewards, may pay heed to the most recent earnings numbers.
Exxon Mobil and Chevron both highlighted increasing investment in the United States in their news releases particularly in the Permian Basin in Texas and New Mexico a region with unconventionally large reserves of both oil and natural gas.
ExxonMobil reported record quarterly production in the Permian and said it was still on target to raise output by 10% overall in 2023.
Chevron also mentioned the Permian’s record quarterly output while mentioning its recently announced $7.6 billion purchase of PDC Energy, which also includes more land in the area.
