Exxon breaks western oil major earnings record with $56 billion in profit for 2022

Exxon Mobile a profit of $56 billion for 2022, the company said Tuesday, taking home about $6.3 million an hour last year and setting not only a company record but also an all-time high for the western world oil industry up.

The oil majors are expected to break their own annual records on high prices and rising demand, taking their total revenues to nearly $200 billion. The scale has once again slammed criticism of the oil industry, prompting calls for more countries to levy windfall profit taxes on the companies.

Exxon’s results far surpassed then-record net income of $45.2 billion reported in 2008, when oil prices hit $142 a barrel, 30% above last year’s average price. Deep cost cutting during the pandemic helped boost last year’s profits.

“Overall revenue and cash flow are up quite significantly year over year,” Exxon chief financial officer Kathryn Mikells told Reuters. “So that really came from a combination of strong markets, strong throughput, strong production and really good cost control.”

Exxon said it suffered a $1.3 billion loss on its fourth-quarter earnings from a European Union windfall tax that began last quarter and asset impairments. The company is suing the EU, arguing that the levy exceeds its legal authority.

Excluding fees, full-year earnings were $59.1 billion. Production rose by about 100,000 barrels per day of oil and gas to 3.8 million bpd over a year ago. Adjusted earnings per share of $3.40 beat consensus of $3.29 per share, according to data from Refinitiv.

Shares fell 1.5% in premarket trading to $111.88.

Windfall Taxes

The results could trigger another confrontation with the White House. President Joe Biden’s administration blasted oil companies on Friday for putting cash into shareholder payouts rather than into production.

Exxon boasted that its cash flow from operations grew to $76.8 billion last year, up from $48.1 billion in 2021.

Windfall profit taxes are “unlawful and bad policy,” countered Mikells. Imposing new taxes on oil revenues “has the opposite effect of what you’re trying to achieve,” she said, adding that it would discourage new oil and gas production.

Exxon posted net fee earnings of $14 billion in the fourth quarter, up 60% from the same period last year but down nearly 25% sequentially as oil prices eased and some operations suffered from cold-related outages.

project expenses

Exxon’s spending on new oil and gas projects rebounded last year to $22.7 billion, up 37% year over year. The company increased spending on discoveries in Guyana, the best US shale field, and fuel refining and chemicals.

“The countercyclical investments we made before and during the pandemic provided the energy and products people needed as economies began to recover,” Exxon chief executive officer Darren Woods said in a statement.

Its results exceed the expected strong yields sleeve on Thursday and from bp and Total Energies next week.