Exxon posts huge loss for pandemic-hit 2020

Daniel Fowler
February 3, 2021

On his inauguration day, Biden signed an executive order revoking the permit for the TC Energy's crude oil Keystone XL pipeline and he has also taken the U.S. back into the Paris climate accords.

Exxon Mobil Corporation reported the largest losses in its history - almost 20.1 billion dollars (£14.7 billion) for the fourth quarter, including more than 19 billion dollars (£13.9 billion) to write down the value of company assets.

According to the Wall Street Journal, ExxonMobil and Chevron even briefly discussed the possibility of merging previous year. "It was the first time in memory that we saw simultaneous lows in each of our businesses".

Together, they would likely form the world's second largest oil company by market capitalization and production-producing about 7 million barrels of oil and gas a day, based on pre-pandemic levels-behind only Saudi Aramco in both measures.

On Monday Exxon announced plans to invest $3 billion in carbon capture and other emissions-cutting technology. Analysts on average expected a penny per share profit, according to a survey by Zacks Investment Research. Revenues fell 30.7 percent to $46.5 billion.

Under pressure from shareholders anxious about the impact of climate change on the company's profitability, ExxonMobil said on Monday that it was creating a business unit dedicated to cleaner energies, ExxonMobil Low Carbon Solutions.

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"Exxon Mobil shareholders deserve a board that works proactively to create long-term value, not defensively in the face of deteriorating returns and the threat of losing their seats", Engine No.1 said in a statement.

Exxon still has "plenty of wood to chop" but the willingness to cut costs to pay the dividend will play well with investors, said Mark Stoeckle, senior portfolio manager at Adams Funds. Peers including BP have also set net-zero targets. "We strengthened our finances - taking out costs and closing major divestments".

The company suddenly sought to cut its expenses, in particular by abandoning projects deemed less strategic such as gas development programs in the United States, Canada and Argentina.

Shares of Exxon rose 2.2% in premarket trading.

XOM shares were better by 67 cents, or 1.5%, to $45.59.

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