LNG

ExxonMobil Corp. posted first-quarter 2022 earnings of $5.58 billion compared with $2.73Bln in the prior-year quarter and $8.87Bln in the previous three months with a $3.4Bln hit taken on exiting Sakhalin-1 oil in the Russian Far East amid progress on Mozambican LNG and Permian Basin activities.

Oil-equivalent production was 3.7 million barrels per day, down 4 percent from the fourth quarter of 2021 due to weather-related unscheduled downtime, planned maintenance, lower entitlements associated with higher prices and divestments.

“The quarter illustrated the strength of our underlying business and significant progress in further developing our competitively advantaged production portfolio,” said Darren Woods, Chairman and Chief Executive.

“Earnings increased modestly, as strong margin improvement and underlying growth was offset by weather and timing impacts. The absence of these temporary impacts in March provides strong, positive momentum for the second quarter,” stated Woods.

Average realizations for crude oil increased 28 percent while first-quarter 2022 downstream earnings were $300 million compared with $1.5Bln in the fourth-quarter 2021.

“Improved industry fuels refining margins and lower expenses were partially offset by lower basestock margins and lower volumes, driven by higher turnaround activity,” said the Irving, Texas-based major.

Permian output

Production in the Permian Basin reached 560,000 barrels per day at the end of the quarter.

“The company remains on track to deliver a production increase of 25 percent this year versus full-year 2021 and to eliminate routine flaring by year-end,” added ExxonMobil.

CEO Woods later discussed the earnings in a conference call with analysts.

“Looking forward, we're also growing our globally diverse portfolio of low-cost, capital-efficient LNG developments,” explained Woods.

“In Mozambique, the 3.4 million ton per year Coral South floating LNG production vessel is being commissioned after arriving on site in January,” he added.

“Coral South is on budget with the first LNG cargo expected in the fourth quarter,” said Woods.

The CEO also explained that the company was making “outstanding progress” on its high-value growth developments in Guyana in South America, in the Permian and in LNG projects.

“Our new Corpus Christi chemical complex is up and running ahead of schedule and generated positive earnings and cash flow in its first quarter of operations,” added Woods.

“In a broad comment on the LNG business, we're seeing across each of our sectors, the pandemic had a pretty profound effect with respect to deferring, delaying capital spend, and, therefore, additional capacity coming on. And as the pandemic has subsided and demand has recovered, we're seeing very tight markets,” explained Woods.

“And then with the Ukraine and the situation there, that has added a significant additional level of uncertainty around supply,” he said.

Dynamic LNG

Woods said the LNG market was currently “very dynamic” and a very high-priced market.

“There is basically very full capacity utilization all around the world, maximizing the amount of LNG moving,” he said.

“Obviously, we've got our Coral LNG starting up later this year, which will help contribute and ease some of that tightness. And then there is Golden Pass,’ added Wood.

“This is an important leg of our strategy of making sure that we have access to LNG supplies that we can supply demand all around the world,” stated the CEO.

“And that's a very important part of our strategy in LNG going forward, is making sure that we've got barrels that we can then move and trade in the marketplace and move across the different regional demand centers. And so I think we're going to continue to look for opportunities in LNG,” declared Woods.

The CEO pointed to opportunities in Papua New Guinea LNG that the company was progressing.

“Obviously, additional investments in Mozambique are in the future as well. And so I think it'll be a very important foundational layer of supply and a really important part of our overall business offering,” he concluded.