Exxon Mobil Corporation (XOM.N) has reported a better-than-expected profit of $36 billion for the fiscal year 2023, buoyed by fuels trading and increased oil and gas production. Despite a 35% decrease in annual income, the results exceeded market projections. The oil major’s strong performance comes amid a broader trend of oil majors experiencing a decline in profits in 2023 compared to the record levels of 2022.
The annual results included a $2.5 billion impairment charge for California properties, contributing to the overall 35% decline in income. Exxon’s move to buy rival Pioneer Natural Resources (PXD.N) and Chevron’s proposal to purchase Hess Corp (HES.N) are seen as strategic steps to bolster their positions in the energy market.
In the fourth quarter, Exxon reported a better-than-expected profit of $9.96 billion, driven by higher trading profits in its fuels business and increased oil and gas production in the U.S. and Guyana. The company’s trading division played a crucial role, delivering a $1.1 billion boost to operating profit from its fuels business.
Brent crude futures averaged $82.85 a barrel in the fourth quarter, contributing to Exxon’s strong quarterly performance. The company’s Chief Financial Officer, Kathryn Mikells, highlighted the positive impact of Exxon’s trading division, emphasizing its contribution to ongoing results.
Exxon’s capital spending for the year reached $26.32 billion, driven by projects in Guyana and the Permian Basin. Despite the challenges faced by the energy sector, Exxon distributed $32 billion to shareholders via buybacks and dividends in the past year.
Looking ahead, Exxon plans $23 billion to $25 billion in capital spending for the current year as it prepares for projects scheduled for 2025. The company’s financial results indicate resilience in the face of market fluctuations and a commitment to returning value to shareholders.