ExxonMobil posts its first yearly loss since 1999 having lost $22.4 billion in 2020, the oil supermajor disclosed on Tuesday.
The energy industry has been battered due to a record oil price crash as the COVID-19 lockdown around the world triggered the steepest fall in oil use in history, and crude producers in Saudi Arabia and Russia saturated the world with a glut in an output dispute for months.
Prices of crude oil traded on global markets in the negative in April, with producers and dealers having to pay to stock up surplus oil instead of being able to sell it.
ExxonMobil had its yearly revenue slump by 31.5 per cent to $181.5 billion.
“The past year presented the most challenging market conditions ExxonMobil has ever experienced,” Darren Woods, the oil and gas firm chief, said.
Woods added that ExxonMobil had embraced expenditure cuts and reorganisation measures in a drive seeking to restore the company to a better shape.
The plans aim to save ExxonMobil $6 billion annually by 2023 relative to pre-pandemic levels. The company also cut capital spend to $21.4 billion, 35 per cent lower than the original proposal for the year.
It promised to maintain dividend payment to investors as it did last year, when other firms shelved dividends on account of escalating losses.
ExxonMobil’s net loss of $22.4 billion was the product of a $19.3 billion writedown of United States natural gas and other assets. It would still have lost $1.4 billion had it averted the writedowns. That compares to a $9.6 billion profit in 2019.
In Nigeria, ExxonMobil’s Qua Iboe stream was placed under force majeure until late January after an inferno in the middle of December 2020 at the oil grade’s terminal.
Revised loadings of the grade plunged to about 61,000 barrels per day over December and January, the weakest rate in over four years. Oil exports resumed last week.
The energy heavyweight recorded a net loss of $20.1 billion in the fourth quarter excluding special items.
It posted an adjusted income of $110 million excluding special items, a fragment of $1.8 billion it earned in the corresponding period of 2019, marking the first profitable quarter it reported for the year.
The stock of ExxonMobil plummeted by 41 per cent in 2020, but shares have rallied by nearly nine per cent so far in 2021 in anticipation of a rebound in the world economy and an uptick in oil prices following the pact between the Organisation of the Petroleum Exporting Countries and Russia to curb production.