ExxonMobil Corp. reported higher fourth quarter earnings but lower results for the full year because of lower natural gas realizations and poor downstream market conditions, according to Chairman Lee Raymond. Fourth quarter net income rose $1.4 billion to $4.1 billion, and Raymond said results for the fourth quarter were the highest since the second quarter of 2001. Full year net income fell $3.9 billion to $11.5 billion.

Fourth quarter earnings from U.S. upstream operations were up $339 million from 4Q2001 to $757 million, while U.S. downstream earnings were up $122 million to $403 million. The company noted that marketing margins were weaker with improvements in the United States more than offset by declines elsewhere.

Earnings from U.S. upstream operations for the full year fell $1.4 billion to $2.5 billion, while U.S. downstream earnings were down $1.2 billion to $693 million for the year. ExxonMobil said that downstream earnings decreased substantially from 2001 because of significantly lower refining margins in most geographical areas, and further weakness in marketing margins.

“Capital and exploration expenditures of $13,955 million in 2002 were up $1,644 million, or 13%, compared with $12,311 million last year,” said Raymond. “Upstream capital spending was 18% higher, consistent with long term investment plans to sustain base capacity and expand profitable production. Operating expenses for 2002 declined $300 million versus 2001. The decline was related to lower energy prices and additional efficiencies captured in all business lines. In 2002, these cost efficiencies exceeded $1 billion and have cumulatively reached $5 billion compared with pre-merger operations.”

Earlier in the week, the global energy explorer announced that for the ninth consecutive year the company has replaced more than 100% of its reserves (see Daily GPI, Jan. 29). ExxonMobil announced additions to its worldwide proved oil and gas reserves totaled 1.9 billion boe in 2002, replacing 117% of production, including property sales.

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