Exxon announces huge increase in profits as lawmakers focus on dividends
(Bloomberg) – Exxon Mobil Corp. scored its highest profit since 2008 when Russia’s war in Ukraine disrupted global commodity markets.
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Exxon’s announcement that first-quarter results may have reached nearly $ 11 billion gives hope for a boom in oil industry profits as trade sanctions, shipping disruptions and increased demand strain the supply lines.
The manna doesn’t come without risk, however. Leading Democrats in the US House of Representatives have asked Exxon and colleagues Chevron Corp., Shell Plc and BP Plc to immediately stop dividends and share buybacks until the war is over, and berated them for “taking advantage of the crisis in Ukraine “.
Political leaders are under pressure to alleviate skyrocketing energy prices and the specter of scarcity. US President Joe Biden last week pleaded with the industry to reinvest profits in new wells to help close the supply gap from averted Russian crude. At the same time, he warned of punishing fines for companies that slow down projects involving federally owned oil prospects.
Lawmakers accused Exxon and the other three oil explorers of collectively spending $ 44 billion on buybacks and payments last year and planning to shell out another $ 32 billion in 2022, according to a letter signed by the committee chair. Supervisory Board of the House Carolyn B. Maloney and Subcommittee on the Environment President Ro Khanna.
Exxon “is charging outrageous gas prices while making record profits,” Senator Ed Markey, a Massachusetts Democrat, said in a Facebook post. “We should tax Big Oil’s extraordinary profits and return that money to the workers of this country.”
Exxon said on Monday that first-quarter results may have been up to $ 2 billion more than earnings during the last three months of 2021, when the company grossed $ 8.8 billion, according to a filing.
Gathering of crude oil
Rising oil prices were the main driving factor, with natural gas and higher refining margins also contributed. International crude oil futures hit a 14-year high of nearly $ 140 a barrel during the quarter.
Separately, Exxon formally approved the $ 10 billion Yellowtail development off the coast of Guyana after receiving government and regulatory approvals. The project is the fourth and largest in an area known as the Stabroek Block and is expected to pump around 250,000 barrels per day as of 2025.
Exxon also revealed that the exit from Sakhalin-1 oil development in the Russian Far East could trigger a devaluation of up to $ 4 billion. The company recently vowed to leave Russia due to international sanctions and what company CEO Darren Woods described as the “needless destruction” of the nation in Ukraine.
Exxon stock traded slightly at $ 82.99 at 2:57 pm in New York.
(Updates with Senator Ed Markey’s comments in the sixth paragraph.)
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