ExxonMobil recorded its first yearly loss since 1999 after losing $22.4 billion in 2020, the oil supermajor said at Tuesday earnings call due to oil glut and it’s twin-brother, price crash in the international oil market.
The energy industry has been taking a battering from a record oil price crash as stay-at-home directives 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 aimed 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.