Profits Jump at Exxon, Chevron, BP, Total, Shell
27 Octobre 2017 - 03:27PM
Dow Jones News
By Bradley Olson and Sarah Kent
Big oil is back in the black.
The world's biggest Western energy companies are on track to
post the highest annual profits since the oil market crashed three
years ago and forced them to restructure for a prolonged era of low
prices.
Third-quarter net income at Exxon Mobil Corp. and Chevron Corp.
grew more than twice as fast as crude prices compared with the same
period last year, a sign that cost-cutting and a new focus on
short-term projects is paying off.
Profits at Exxon and Chevron rose by 50% or more, with Exxon on
Friday reporting net income of $4 billion and Chevron $2 billion.
France's Total SA reported a 40% improvement in the third quarter,
compared with $2.7 billion in the same period the prior year.
Analysts now estimate that the five largest oil companies --
Exxon, Chevron, Total, BP PLC and Royal Dutch Shell PLC -- will
rake in more than $50 billion in 2017, according to FactSet. That
is the most since 2014, when oil sold for more than $110. Brent
crude was trading at just below $60 this week.
"These companies are becoming much more streamlined," said Brian
Youngberg, an energy analyst at Edward Jones. "They've all been
aggressive in driving costs down to maintain profitability even if
oil prices remain low. You're not seeing as many big, expensive
projects. Those days are gone."
The fortunes of the companies have also been lifted by strong
demand for chemicals and fuels like gasoline and diesel. Exxon,
Total and Shell are now run by former refining executives, and
Chevron will be as well in February, when Michael Wirth is
scheduled to take over for John Watson, the company's retiring
chief executive.
The pivot to refining expertise in top executive ranks comes as
the oil giants seek experienced hands at managing spending rather
than chasing potentially expensive new barrels. To keep costs down,
many of the companies have curbed their ambitions, turning instead
to smaller, incremental developments that pay back more quickly
than multibillion-dollar megaprojects.
Oil prices were 14% higher from July to September compared with
the same period in 2016. The spot price of liquefied natural gas,
which has increased in importance to the companies as they seek to
reduce emissions from their operations, has risen 60% since July,
according to analysts at Cowen.
Even as profits continue to improve, investors have soured on
many oil companies this year, put off by years of poor returns and
strategies oriented toward growth that didn't improve
profitability. Only about $1.3 billion has flowed into
energy-focused equity funds for the year through Oct. 20, compared
with over $6 billion in 2016 and $20 billion in 2015, according to
data from EPFR Global.
Last year, the five companies spent $31 billion more in cash on
new investments and dividends than they generated from operations,
according to FactSet. Exxon has fallen 8% so far this year and
Chevron's shares are largely flat in 2017. Shell's American
depositary receipts have risen by 12.5%, while Total and BP's U.S.
shares have seen modest gains. All have fallen short of the
increase in the S&P 500 index.
Write to Bradley Olson at Bradley.Olson@wsj.com and Sarah Kent
at sarah.kent@wsj.com
(END) Dow Jones Newswires
October 27, 2017 09:12 ET (13:12 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
TotalEnergies (EU:TTE)
Graphique Historique de l'Action
De Fév 2024 à Mar 2024
TotalEnergies (EU:TTE)
Graphique Historique de l'Action
De Mar 2023 à Mar 2024