Downstream earnings down to US$425 million in 4Q11, compared with the US$1.579 reported for 3Q11. Exxon makes full-year profit of US$41.06 billion.

ExxonMobil, the world’s largest publicly traded international oil and gas
company, has released its results for the fourth quarter 2011.

Net income for ExxonMobil in 4Q11 came in at US$9.4 billion, down US$930million (–9%) QoQ, but up US$150 million on year (1.62%). Upstream volumes dropped by 9% on year (liquids down 276,00bpd, natural gas down –975,000cfpd), but were up 6% compared with 3Q11.

Full-year net income for 2011 (as calculated by GTForum from the sum of all four quarters), amounted to US$41.06 billion, compared with the US$32.47 billion seen in 2010, an increase of US$8.59 billion, or 26.46%. On a full-year basis, upstream volumes were up 1% in 2011, with growth in natural gas offsetting a 110,000bpd decline in liquid production.

During a conference call to announce the results, David Rosenthal, vice-president, investor relations, responded to a question over whether the recent divestment was part of a wider strategy.

“It’s part of an ongoing programme we’ve had in the downstream [segment] for a long time as opposed to any specific change in strategy or event. We, like others, have been looking at our downstream assets around the world and where we’ve had assets in certain locations that are of significantly more value than others, we’ve actually sold those businesses,” Rosenthal said.

“The resulting impact has been very positive on our returns in the downstream. We are about to finish the retail conversion in the US. The earnings associated with those divestments have been very strong.”

Rosenthal added that the sales announced last year in Malaysia, Argentina and Central America should close some time in 1Q12 and 2Q12.

“The Japan restructuring should also close by mid-year. Taking all that into account, we continue to invest in the business where it makes sense… We remain committed to these businesses, but in certain parts of the world demand for transportation fuels is flat to down and I would expect us to optimise there,” Rosenthal said.

“If you look over the last couple of years, it’s been a very successful asset management programme and we’re very pleased with it, but it is an opportunistic programme.”

Downstream results 

Net earnings from ExxonMobil’s downstream activities came in at US$425 million for 4Q11, compared with the US$1.579 billion and US$1.150 billion seen for 3Q11 and 4Q10, respectively, primarily due to lower refining margins. In comparison, earnings from upstream activities showed much less volatility, with the segment reporting earnings of US$8.829 billion in 4Q11, compared with the US$8.394 billion and US$7.480 billion seen in 3Q11 and 4Q10.

Refinery throughput in the US rose by 6.2% on year to 1.839mbpd in 4Q11, but rose only 1.77% YoY to 1.784mbpd. Worldwide, throughput dropped by 48,000bpd (0.9%) on year in 4Q11 and by 39,000bpd (0.74%) YoY to 5.253mbpd.

Worldwide petroleum product sales fell by 62,000bpd to 6.493mbpd in 4Q11 and by 1,000bpd YoY to 6.413mbpd.

Capital expenditure in Exxon’s downstream segment totalled US$2.12 billion in 2011, while that for its E&P and chemical segments came in at US$33.09 billion and US$1.499 billion, respectively. Of the sum invested in downstream operations in 2011, US$518 million (24.4%) was spent in the US, compared with the 32.4% seen for the upstream segment. In 2010, downstream capital expenditure came to US$982 million, of which 39.2% was spent in the US. For the sake of comparison, in
the same year, US$27.32 billion was spent on ExxonMobil’s upstream segment,
of which 23.24% was spent in the US.

According to a 4Q11 earnings presentation, Exxon will be “investing in lower-sulphur fuel capacity for growing markets” and in 2011, it completed the Sriracha refinery, Thailand, which is expected to increase production of low sulphur gasoline and diesel by over 50,000bpd.

The company also started a lower-sulphur fuels project at the Saudi Aramco Mobil Refinery (Samref), in Saudi Arabia, which will increase gasoline and diesel hydrotreating as well as sulphur recovery. It is on track for completion in 2013.