In the first quarter of 2023, ExxonMobil, a US energy company, reported a record profit of $11.4bn, which is more than double what it earned in the same period last year. This increase in profits was the result of increased demand for oil and gas and the company’s cost-cutting initiatives. The company was still able to achieve record-breaking profits despite falling crude prices and a $200 million hit from windfall taxes in Europe.
Cost-Reduction Measures and Robust Production Development
ExxonMobil attributed its robust first-quarter profits to cost-cutting measures and robust production growth, propelled by new offshore developments and refining facilities. The company’s oil and gas production reached its highest level since 2019 due in large part to rising hydrocarbon production in Canada. The company’s refining division was also a “star performer” for the fourth consecutive quarter, earning over $4 billion.
Challenges to the law and Criticism
ExxonMobil is failing to return sufficient profits to its shareholders, despite high oil and gas prices. The company is presently involved in a legal dispute with the European Union, in which it seeks to halt the EU’s new windfall tax on its oil firms. The company contends that the tax would deter investment and exceed the EU’s legal authority.
Profits Increased at Chevron
Chevron, a rival US oil company, also reported an increase in revenues between January and March, with earnings of nearly $6.6 billion. This is a 5 percent increase from the same time period last year. Chevron, like ExxonMobil, paid a £130 million windfall tax in the UK. Shell and BP are anticipating to release their most recent financial results, with both companies expected to have made substantial profits due to elevated oil and gas prices.
Source: ©Idrees Abbas/SOPA Images/LightRocket via Getty Images ; BBC
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