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Not a Great Time for Big Oil
Energy

Not a Great Time for Big Oil

Crude prices may have stabilized, but it is still not a great time to be Big Oil.
Investors eliminated about $53 billion in market value for producers over three days as the twin titans of US oil posted their worst annual financial outcomes in decades. With Royal Dutch Shell Plc, Total SA and BP Plc due to announce 2016 results in coming days, the grim headlines may not yet be over, Bloomberg reported.
Exxon Mobil Corp. reported Tuesday a $2 billion writedown of its natural gas fields, lower-than-expected quarterly profit and a full-year result that was its worst since 1996. That followed Chevron Corp., which reported its first yearly loss in at least 37 years on Jan. 27.
Drillers have responded to the 2 1/2-year slide in energy markets by firing hundreds of thousands of workers, auctioning off billions of dollars in assets, abandoning their riskiest projects and living on borrowed cash. The latest results, though, suggest the industry may still need recovery time, even with crude prices more than doubling since dipping to a 12-year low in February 2016.
For Exxon, it was the ninth-straight quarter of year-on-year profit declines, the longest such streak since at least 1988. The bleak result capped Rex Tillerson’s final quarter at the helm of the world’s largest oil producer by market value. 
The market collapse aggravated the impact Exxon felt from its own stillborn Russian drilling venture, domestic legal disputes over whether the company engaged in climate-science deception and the loss of its gold-plated credit rating.
Exxon’s writedown slashed fourth-quarter profit to $1.68 billion, or 41 cents a share, more than 40% lower than the average estimate of 21 analysts in a Bloomberg survey, the widest gap since at least 2006.
Chevron and Exxon are taking markedly different approaches to the lingering sting of 2016. Whereas Chevron plans to shrink expenditures on drilling and other projects by 15% to conserve cash, Exxon said Tuesday it will boost its budget by 14% to $22 billion.

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