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Oil majors made $48bn in profits from crude in the first quarter of 2023

Oil majors made $48bn in profits from crude in the first quarter of 2023

Oil majors’ earnings from crude oil activities in the first quarter of the year hit over $47.9 billion, a development that accounts for a decrease compared with the fourth quarter of 2022.

The oil majors’ earnings dipped by 4.6 percent from $50.2 billion in the fourth quarter of 2022 to $47.9 billion in the first quarter of 2023, according to BusinessDay’s analysis of their various quarterly reports.

However, the earnings made in Q1 2023 grew by 262.9 percent to supersede the $13.2 billion recorded in the same quarter of 2022. This is on top of the $20.4 billion loss recorded by BP in Q1 2022.

Data gleaned from the oil majors’ quarterly reports showed that ExxonMobil and Shell Plc earned the most in Q1 2023 with $11.4 billion and $9.6 billion, respectively, while Eni recorded the lowest with $5.16 billion.

Darren Woods, chairman, and chief executive officer of ExxonMobil, said the hard work of the company to execute its strategic priorities delivered a record first quarter following a record year.

“We are growing value by increasing production from our advantaged assets to meet global demand.”

ExxonMobil’s first-quarter 2023 earnings were $11.4 billion, compared with $12.8 billion in the fourth quarter of 2022. The company said, excluding the identified item associated with additional European taxes on the energy sector, earnings were $11.6 billion compared to $14.0 billion in the prior quarter.

“Identified items in the fourth quarter included a higher impact from the additional European taxes on the energy sector, asset impairments, and one-time adjustments related to the Sakhalin-1 expropriation.”

Lower liquids and natural gas realisations coupled with the absence of favourable mark-to-market impacts on unsettled derivatives, fewer days in the quarter, and higher scheduled maintenance negatively impacted results sequentially, according to a statement by ExxonMobil.

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“Our company delivered strong results and robust operational performance in the first quarter against a backdrop of ongoing volatility, while continuing to provide vital supplies of secure energy,” said Wael Sawan, Chief Executive Officer of Shell plc.

According to a statement by Shell, it recorded in Q1 2023 adjusted earnings of $9.6 billion, with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $21.4 billion, with improved operational performance, lower underlying opex, and better results in Chemicals and Products driven by trading and optimisation offsetting the impact of lower oil and gas prices and higher tax compared with Q4 2022.

Shell’s adjusted earnings were lower compared with Q4 2022 due to lower prices, the timing of liftings, and tax help in Q4 2022, which were partly offset by lower opex. It was also said that the Q2 2023 production outlook reflects higher scheduled maintenance and completed divestments.

Claudio Descalzi, CEO of Eni, said the earnings made by his company were driven by a resilient E&P result that featured a recovery in hydrocarbon production and very strong gas and LNG performance.

“We also saw a steady contribution from biorefineries, the commercial network, and continued growth from Plenitude and Power, meaning the company recorded €4.6 billion of adjusted EBIT and €2.9 billion of adjusted net profit.”

“During the quarter, we made substantial progress against our strategy and plans. We set up Sustainable Mobility, Eni’s latest satellite business, which combines our growing biorefining portfolio with our mobility product marketing operation,” said Descalzi.

Overall, most of the oil majors recorded a decrease in earnings in the first quarter of 2023 compared to Q4 2022, citing lower oil and gas prices and higher taxes, among others.

In Q4 2022, ExxonMobil, BP, and Shell earned $12.8 billion, $10.8 billion, and $9.8 billion, respectively. While TotalEnergies, Chevron, and Eni recorded $7.6 billion, $6.4 billion, and $2.8 billion, respectively, in the same period.