Exxon Mobil reports fourth-quarter profit of $8.9 billion as oil prices soar.

HOUSTON — Exxon Mobil, the largest U.S. oil company, reported its strongest earnings in seven years on Tuesday as it rides a wave of rising oil and natural gas prices.

Announcing its financial comeback after several years of lackluster returns and criticism of its environmental performance, the company said it would resume buying back $10 billion in shares over the next two years, the first buyback since 2016.

Exxon said it made $8.9 billion in the three months ending December on revenue of $84.9 billion. The company had earned $6.8 billion in the third quarter. For the year, Exxon earned $23 billion, compared to a loss of $22.4 billion in 2020, when oil and gas prices fell due to the economic downturn caused by the pandemic. The annual profit was the highest since 2014.

The company’s success, however, was largely due to a recovery in oil prices throughout 2021 as energy demand rebounded.

By the end of the fourth quarter, the price of West Texas Intermediate crude, the US benchmark, had risen more than 50%, reaching an average of $67 a barrel. Oil prices continued to climb above $80 a barrel due to tight supplies and tensions between Russia and Ukraine. Natural gas prices were up more than 40% from 2020 in the quarter and have risen again in recent weeks as temperatures plummeted in many regions.

“We made great progress in 2021, and our plans for the future position us to lead in cash flow and earnings growth, operational performance and energy transition,” said Darren Woods, director general of Exxon.

The company said it increased its oil and gas production by 2% from 2020, mainly due to increased production in the Permian Basin, which straddles Texas and New Mexico, and off Guyana in South America. It also reported improved margins from its refining business, despite continued declines in jet fuel demand.

Responding to growing concerns about climate change, Mr Woods told analysts on a conference call on Tuesday that the company had pledged to invest in carbon capture and sequestration, biofuels like renewable diesel and oil. hydrogen.

“There is growing recognition and growing acceptance of the need for a variety of approaches,” Mr. Woods said, “to ensure that we make progress in reducing emissions, but at the same time, let’s not compromise people’s quality of life.”

Exxon shares rose more than 6% at the close of trading on Tuesday. Still, the price remains below its levels of a decade ago. In response to lackluster returns, investors pressured Exxon and other oil companies to control spending and improve shareholder returns with dividends and stock buybacks.

The company said last month it would spend $20 billion to $25 billion a year on investments through 2027, down as much as 33% from spending plans before the pandemic drove prices down. oil in 2020.

The cash return to shareholders is part of an industry-wide waiver of automatic investment in increased production and the acquisition of oil and gas reserves. This trend supported stock prices, but also limited US oil production below 2019 levels.

Exxon said Monday it is streamlining its operations, combining its chemicals, refining and marketing businesses and running its technology and engineering units to save more than $6 billion over the next two years from to 2019. The company will relocate its headquarters to a suburb of Houston where most operations are already centered on a 385-acre campus, from Irving, a suburb of Dallas.

On Tuesday, Mr Woods said the new structure would “further strengthen our competitive advantages”.

Steve R. Hansen