ExxonMobil Profits Double From Their Annual Earnings

exxonmobil profits double

ExxonMobil is one of the largest oil companies in the US and the world. And though their earnings slowed down in the past year, their records show that ExxonMobil profits double compared to their reported annual earnings from a year ago. This bodes well for the company, as projections show that it is potentially going to continue earning similar profits for the upcoming quarters of 2023.

Who is ExxonMobil?

ExxonMobil is a multinational oil and gas company that is based in Irving, Texas and is considered a direct descendant of John D. Rockefeller’s Standard Oil. Formed on November 30, 1999, ExxonMobil was the product of the merger of two big retail brands, Exxon and Mobil. Apart from oil and gas, the company is also seen producing plastic, synthetic rubber, and other chemical products. The company is considered one of the ten largest companies in the US by revenue. It is no wonder that despite the pandemic and global economic cooldown, ExxonMobil profits hugely from its businesses.

Increased Profits

In 2021, ExxonMobil earned about $23 billion back in 2021 but made a record earning of $59.1 billion in 2022. This is more than double the previous year and well over the previous largest reported income of $45.2 billion in 2008, which was a year that saw record highs for oil and gas prices.

2022’s large margin of profits is mostly attributed to the ongoing European crisis surrounding Russia’s invasion of Ukraine and Russia’s subsequent closing its oil and gas pipelines going into Europe. Gas prices are now stabilizing and going back to pre-invasion levels but despite this, ExxonMobil has seen great profits.

Complaints Against ExxonMobil

The White House and some members of Congress have criticized oil companies like ExxonMobil for collecting a large portion of the earnings and using it to buy back shares and increase dividends rather than increasing output.

CEO Darren Woods defended the company’s production investments, claiming that its North American refineries had their highest output ever and that its global refinery production was at its best level since 2012.

According to Woods, “Our earnings certainly benefited from a good market.” “However, we started working on taking full advantage of the undersupplied market years ago, well back before the epidemic, when we made the decision to invest counter-cyclically. We defied tradition and leaned in when others leaned out. We kept making these investments throughout the pandemic and up until the present.

Nevertheless, the corporation paid out $29.8 billion in dividends and share repurchases to stockholders over the course of the year.

More Background on ExxonMobil

Exxon and Mobil entered into a US$73.7 billion formal merger deal in 1998, creating the world’s largest corporation, Exxon Mobil Corp. The merger was finalized on November 30, 1999, following shareholder and regulatory clearances. The unification of Standard Oil Co. of New Jersey/Exxon and Standard Oil Co. of New York/Mobil, which had been forcibly split apart by government authority over a century earlier, through the Exxon and Mobil merger was unprecedented in American history. The largest merger in US corporate history was brought about by this reunion.

As part of a sale of California assets required by the FTC, ExxonMobil sold 340 Exxon-branded stations and a refinery in Benicia, California, to Valero Energy Corp. in 2000. In California, ExxonMobil still provides petroleum products to approximately 700 stores that sell products under the Mobil brand.

ExxonMobil overtook General Electric as the largest company in the world in terms of market capitalization in 2005 as the stock price of the company increased concurrently with rising oil prices. It announced record profits of US $36 billion at the end of 2005, an increase of 42% from the previous year (the total annual income was an all-time record for annual income by any business and included $10 billion in the third quarter alone, an all-time record income for a single quarter by any business). In order to put these gains into perspective, the firm and the American Petroleum Institute (the lobbying group for the oil and chemical industries) compared oil industry revenues to those of other sizable sectors like banking and pharmaceuticals.

ExxonMobil said on June 12, 2008, that it was leaving the direct-served retail sector due to the increasing difficulties of operating gas stations amid rising crude oil prices. The multi-year approach, which will impact 820 company-owned stations and roughly 1,400 other stations run by dealers distributed across the United States, will gradually phase the firm out of the direct-served retail sector. ExxonMobil has licensed the relevant names to the new owners, who will pay the company for the usage of the brands. As a result, the Exxon and Mobil branded stations have not been eliminated as a result of the transaction.

ExxonMobil acquired XTO Energy, a business specializing in the exploration and production of unconventional resources, in 2010.

Many gas and oil businesses are taking into account the economic and environmental advantages of floating liquefied natural gas when predicting probable future advancements (FLNG). This cutting-edge technology enables the development of offshore gas resources that would otherwise go unused due to economic or environmental constraints that make it impractical to develop them through a land-based LNG plant. The only FLNG facility now under construction, which is being built by Shell and scheduled to be finished in or around 2017, is something that ExxonMobil is waiting for to commence its FLNG development.

ExxonMobil announced in 2012 that it has signed a contract for production and exploration activities in the Iraqi Kurdistan area.

“Exxon is commencing work with Russia’s OAO Rosneft in examining what might be significant quantities of shale oil in Western Siberia,” said Exxon CEO Rex Tillerson in 2013. “There is huge shale potential in shale rocks in West Siberia…we just don’t know what the quality is.”

Exxon and CLP Holdings reached an agreement in November 2013 to sell Exxon’s majority holdings in Castle Peak Co Ltd, a Hong Kong-based utility and power storage company, for a total of $3.4 billion.