Exxon Mobil Corp (XOM.N) posted a $56 billion profit for 2022, the company said on Tuesday, taking home about $6.3 million per hour last year, and setting not only a company record but a historic high for the Western oil industry.
Oil majors are expected to break their own annual records on high prices and soaring demand, pushing their combined take to near $200 billion. The scale has renewed criticism of the oil industry and sparked calls for more countries to levy windfall profit taxes on the companies.
Exxon’s results far exceeded the then-record $45.2 billion net profit it reported in 2008, when oil hit $142 per barrel, 30% above last year’s average price. Deep cost cuts during the pandemic helped supercharge last year’s earnings.
“Overall earnings and cashflow were up pretty significantly year on year,” Exxon Chief Financial Officer Kathryn Mikells told Reuters. “So that came really from a combination of strong markets, strong throughput, strong production, and really good cost control.”
Exxon said it incurred a $1.3 billion hit to its fourth-quarter earnings from a European Union windfall tax that began in the final quarter and from asset impairments. The company is suing the EU, arguing that the levy exceeds its legal authority.
Excluding charges, profit for the full year was $59.1 billion. Production was up by about 100,000 barrels of oil and gas per day over a year ago to 3.8 million bpd. Adjusted per share profit of $3.40 beat consensus of $3.29 per share, according to Refinitiv data.
Shares were down 1.5% in pre-market trading to $111.88.
The results may set up another confrontation with the White House. President Joe Biden’s administration on Friday blasted oil firms for pouring cash into shareholder payouts rather than production.
Exxon boasted that its cash flow from operations soared to $76.8 billion last year, up from $48.1 billion in 2021.
Windfall profit taxes are “unlawful and bad policy,” countered Mikells. Slapping new taxes on oil earnings “has the opposite effect of what you are trying to achieve,” she said, adding that it would discourage new oil and gas production.
Exxon posted $14 billion in fourth-quarter profit excluding charges, 60% more than the same period last year but down almost 25% from the previous quarter as oil prices eased and some operations suffered from cold-weather-related outages.
Exxon’s spending on new oil and gas projects bounced back last year to $22.7 billion, up 37% from the prior year. The company increased outlays on discoveries in Guyana, in the top U.S. shale field, and on fuel refining and chemicals.
“The counter-cyclical investments we made before and during the pandemic provided the energy and products people needed as economies began recovering,” Exxon Chief Executive Officer Darren Woods said in a statement.
Its results come ahead of what are expected to be strong earnings from Shell plc on Thursday and from BP plc and TotalEnergies next week.