Reports related to this article:
Project(s): View 6 related projects in PECWeb
en
Researched by Industrial Info Resources (Sugar Land, Texas)--Exxon Mobil Corporation's (NYSE:XOM) (Irving, Texas) financial status is improving, as demonstrated by the company's second-quarter 2021 earnings results. Earnings were up across all three of the company's major segments, Upstream, Downstream and Chemical, compared with the first quarter. Although narrowed from first-quarter 2021, the company's Downstream segment reported a loss, while the Chemical segment reported its best-ever quarterly earnings.
In the company's second-quarter earnings conference call, ExxonMobil Chief Executive Officer Darren Woods made no bones about addressing the elephant in the room: the shakeup of the company's board of directors in the second quarter by activist shareholders, led by hedge fund Engine No. 1. Woods said the onboarding process for three new directors began in June, which included ExxonMobil's approach to the Energy Transition. Last week was the board's first in-person meeting since the shakeup. "We had very substantive and productive discussions, across both committees and the full board, that were informed by the extensive shareholder engagements of the past several months," said Woods. "I'm pleased to say that without exception our directors are focused on improving the performance of the company, addressing the challenges faced by our industry and increasing long-term shareholder value."
Financially, ExxonMobil seems on the right track to do this. Second-quarter earnings were $4.69 billion, compared with a loss of $1.08 billion in the prior-year quarter and up from $2.73 billion in the first quarter of this year.
Upstream
Profits increased in the Upstream segment, despite a 3% decrease in liquids volumes from the first quarter, driven by increase planned maintenance activity. During the quarter, production volumes in the Permian Basin averaged 400,000 barrels of oil equivalent per day, an increase of 34% from second-quarter 2020.
In addition to the Permian, the company is focusing on offshore development in Brazil and Guyana. New discoveries continue to be made in Guyana, and in the second quarter, ExxonMobil made a positive financial investment decision to proceed with the Bacalhau development offshore Brazil. The 220,000-barrel-per-day (BBL/d) project is expected to start up in 2024. Subscribers to Industrial Info's Global Market Intelligence (GMI) Production Project Database can click here for the detailed project reports.
Downstream
While demand for refined products improved in the quarter with the global economic recovery, the Downstream sector still faces challenges. "While there was improved demand for gasoline and diesel, margins continue to be impacted by product oversupply and depressed jet [fuel] demand, driven by lower international travel," said Stephen Littleton, vice president of Investor Relations.
Among the company's ongoing downstream projects is the expansion of its refinery in Beaumont, Texas, where a 250,000-BBL/d crude oil unit is being added, along with a kerosene hydrotreater, diesel hydrotreater and benzene recovery unit. Jack Williams, senior vice president over Downstream and Chemical, said process units were onsite and construction activity was ramping up for startup in 2023. Subscribers to Industrial Info's Refining Database can click here for the project report. Williams said, "Even in the current challenging refining environment, these downstream projects are still attractive and materially improve the competitiveness of our integrated sites."
Chemical
Demand for chemical products has risen greatly, and ExxonMobil's Chemical segment shows this, boasting its best-ever quarterly earnings in the just passed quarter, at $2.32 billion excluding certain items, more than a $900 billion improvement over the first quarter. Tight supply and constrained shipping are contributing to these strong returns.
"Chemical's record results were driven by strong base reliability, robust demand, and tight supply for both polyethylene and polypropylene in the North American and European markets," said Williams. "The last 18 months have been a testament to the underlying resiliency in demand for chemical products, and that is especially true in a surging global economic recovery, as these products are widely needed for food packaging, hygiene and the recovering automobile sector, among others. This year, polyethylene and polypropylene margins across North America and Europe increased by more than 140% versus the fourth quarter of last year. The recovery in Asia has been more challenging due to pockets of COVID resurgence, higher supply, and increased crude and naphtha prices." About 70% of ExxonMobil's polyethylene capacity is located in North America and Europe.
Williams said that the company's chemical complex project in Portland, Texas, which will include an ethylene production unit and derivatives units, was ahead of schedule and under budget. "We just announced mechanical completion of the three derivatives units, including a monoethylene glycol unit and two polyethylene reactors," he said. Subscribers to Industrial Info's Chemical Processing Database can click here for the related project reports.
ExxonMobil's capital expenditures in the second quarter were $3.8 billion. This year, the company expects to remain on the lower end of its spending estimate of $16 billion to $19 billion.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
In the company's second-quarter earnings conference call, ExxonMobil Chief Executive Officer Darren Woods made no bones about addressing the elephant in the room: the shakeup of the company's board of directors in the second quarter by activist shareholders, led by hedge fund Engine No. 1. Woods said the onboarding process for three new directors began in June, which included ExxonMobil's approach to the Energy Transition. Last week was the board's first in-person meeting since the shakeup. "We had very substantive and productive discussions, across both committees and the full board, that were informed by the extensive shareholder engagements of the past several months," said Woods. "I'm pleased to say that without exception our directors are focused on improving the performance of the company, addressing the challenges faced by our industry and increasing long-term shareholder value."
Financially, ExxonMobil seems on the right track to do this. Second-quarter earnings were $4.69 billion, compared with a loss of $1.08 billion in the prior-year quarter and up from $2.73 billion in the first quarter of this year.
Upstream
Profits increased in the Upstream segment, despite a 3% decrease in liquids volumes from the first quarter, driven by increase planned maintenance activity. During the quarter, production volumes in the Permian Basin averaged 400,000 barrels of oil equivalent per day, an increase of 34% from second-quarter 2020.
In addition to the Permian, the company is focusing on offshore development in Brazil and Guyana. New discoveries continue to be made in Guyana, and in the second quarter, ExxonMobil made a positive financial investment decision to proceed with the Bacalhau development offshore Brazil. The 220,000-barrel-per-day (BBL/d) project is expected to start up in 2024. Subscribers to Industrial Info's Global Market Intelligence (GMI) Production Project Database can click here for the detailed project reports.
Downstream
While demand for refined products improved in the quarter with the global economic recovery, the Downstream sector still faces challenges. "While there was improved demand for gasoline and diesel, margins continue to be impacted by product oversupply and depressed jet [fuel] demand, driven by lower international travel," said Stephen Littleton, vice president of Investor Relations.
Among the company's ongoing downstream projects is the expansion of its refinery in Beaumont, Texas, where a 250,000-BBL/d crude oil unit is being added, along with a kerosene hydrotreater, diesel hydrotreater and benzene recovery unit. Jack Williams, senior vice president over Downstream and Chemical, said process units were onsite and construction activity was ramping up for startup in 2023. Subscribers to Industrial Info's Refining Database can click here for the project report. Williams said, "Even in the current challenging refining environment, these downstream projects are still attractive and materially improve the competitiveness of our integrated sites."
Chemical
Demand for chemical products has risen greatly, and ExxonMobil's Chemical segment shows this, boasting its best-ever quarterly earnings in the just passed quarter, at $2.32 billion excluding certain items, more than a $900 billion improvement over the first quarter. Tight supply and constrained shipping are contributing to these strong returns.
"Chemical's record results were driven by strong base reliability, robust demand, and tight supply for both polyethylene and polypropylene in the North American and European markets," said Williams. "The last 18 months have been a testament to the underlying resiliency in demand for chemical products, and that is especially true in a surging global economic recovery, as these products are widely needed for food packaging, hygiene and the recovering automobile sector, among others. This year, polyethylene and polypropylene margins across North America and Europe increased by more than 140% versus the fourth quarter of last year. The recovery in Asia has been more challenging due to pockets of COVID resurgence, higher supply, and increased crude and naphtha prices." About 70% of ExxonMobil's polyethylene capacity is located in North America and Europe.
Williams said that the company's chemical complex project in Portland, Texas, which will include an ethylene production unit and derivatives units, was ahead of schedule and under budget. "We just announced mechanical completion of the three derivatives units, including a monoethylene glycol unit and two polyethylene reactors," he said. Subscribers to Industrial Info's Chemical Processing Database can click here for the related project reports.
ExxonMobil's capital expenditures in the second quarter were $3.8 billion. This year, the company expects to remain on the lower end of its spending estimate of $16 billion to $19 billion.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
