Low prices hit ExxonMo­bil and Chevron earn­ings

The Myanmar Times - - International Business -

LOW crude prices and weak re­fin­ing mar­gins weighed on third-quar­ter prof­its at US oil gi­ants ExxonMo­bil and Chevron. But the heavy im­pact of the in­dus­try’s slump on com­pany per­for­mance may have bot­tomed out, as earn­ings rose com­pared with the prior two quar­ters at both.

ExxonMo­bil notched a 37.5 per­cent de­cline in prof­its to US$2.7 bil­lion while Chevron dis­closed a 36.8pc fall to $1.3 bil­lion.

Chevron shares surged on its first profit after three suc­ces­sive quar­ters in the red, while Exxon re­treated after it warned it may be forced to slash its eco­nom­i­cally vi­able petroleum re­serves es­ti­mate by nearly 20pc due to low oil prices.

Net earn­ings fell sharply in both Exxon’s up­stream di­vi­sion, which ex­plores for and pro­duces crude oil and nat­u­ral gas, and its down­stream di­vi­sion, which pro­cesses crude into gaso­line and other petroleum prod­ucts.

Exxon said it could re­move 4.6 bil­lion bar­rels from its vi­able re­serves ac­count­ing, with the bulk from the Kearl oil sands project in Canada, a re­gion hit hard by the slump in oil prices. The firm is un­der­tak­ing a broader re­view of its as­sets that could re­quire write-downs.

The move comes as Exxon faces an in­ves­ti­ga­tion in New York state for not writ­ing down as­sets due to the oil price crash, a de­ci­sion that al­lowed it to re­port prof­its while ri­vals such as Chevron and Royal Dutch Shell re­ported losses.

Exxon is also re­port­edly be­ing probed by the US Se­cu­ri­ties and Ex­change Com­mis­sion over its fi­nan­cial state­ments and its ac­count­ing of the po­ten­tial im­pact of cli­mate change mit­i­ga­tion poli­cies.

While Exxon’s re­port raised fresh ques­tions, ri­val Chevron at last pointed to progress after a lengthy slump. Earn­ings fell in both up­stream and down­stream di­vi­sions re­ported, but the oil gi­ant man­aged to turn a profit.

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