ExxonMobil leaned in when some competitors leaned out, and the supermajor has used the advantage to capture the upside, CEO Darren Woods said Tuesday.


Woods and his executive team shared 4Q2022 and full-year results during a wide-ranging conference call. 

“Our results clearly benefited from a favorable market,” Woods told investors. “But to take full advantage of the undersupplied market, our work began years ago, well before the pandemic when we chose to invest counter-cyclically

“We leaned in when others leaned out, bucking conventional wisdom. We continued with these investments through the pandemic and into today.”

The entire oil and gas industry failed to invest in resources for years, he said, followed by “significant losses” during the Covid-19 pandemic. Those factors, he said, have led to an inability to meet recovering demand.

However, ExxonMobil has worked to boost output and simultaneously reduce emissions.

“For too long, the conventional wisdom has been that ExxonMobil must choose between meeting the world’s energy needs or playing a leading role in the energy transition,” Woods said. “In fact, it is an ‘and’ equation, one in which we help meet the world’s energy needs and lead in reducing greenhouse gas emissions, both our own and for others.”

Permian, Guyana Gains

Worldwide production in the fourth quarter was 3.8 million boe/d, up about 100,000 boe/d from 3Q2022 and 25,000 boe/d higher than in 4Q2021. The gains came despite the loss of about 140,000 boe/d from divestments and the exit from the Sakhalin-1 project in Russia

Global upstream volumes averaged 2.5 million boe/d in 4Q2022, compared with year-earlier volumes of 2.4 boe/d. In the U.S. upstream, volumes increased to 789,000 boe/d from 770,000 boe/d. Canada/Other Americas volumes totaled 682,000 boe/d versus 641,000 boe/d in 4Q2021.

Gains in output primarily came from the Permian, with record production of more than 560,000 boe/d, and from Guyana’s offshore, where the Stabroek discoveries continue to proliferate. Together, Permian and Guyana volumes rose by 30%-plus year/year. Production in the Permian grew about 90,000 boe/d, with Guyana up by around 70,000 boe/d.  

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Also contributing to volumes was the ramp up of the Coral liquefied natural gas development in Mozambique, in which ExxonMobil is a partner.

Worldwide natural gas volumes averaged 8.17 Bcf/d in 4Q2022, down from year-earlier volumes of 8.58 Bcf/d. U.S. gas volumes fell to 2.38 Bcf/d from 2.71 Bcf/d in 4Q2021. Canada/Other Americas plunged to 74,000 Mcf/d versus 189,000 Mcf/d a year earlier.

As output has risen, the company has continued to reduce greenhouse gas emissions. Methane emissions intensity “at all operated assets” was cut by more than 40% in 2022 from 2016 levels. By the end of last year, the company also had “eliminated routine flaring from all of our operated assets in the Permian,” Woods said. “That’s a key step toward our goal of net zero in the Permian by 2030.”

The Low Carbon Solutions business fetched a “first-of-its-kind customer contract” last year to capture and permanently store up to 2 million metric tons/year (mmty) of carbon dioxide (CO2), Woods said. “This agreement, in a hard-to-decarbonize sector, highlights how ExxonMobil can leverage our advantages to help others reduce their emissions and build an attractive business with strong returns and significant opportunities for growth.”

Inflation Reduction Act Incentives

The CEO also praised the passage last year of the Biden administration’s Inflation Reduction Act, “which incentivizes both hydrogen and carbon capture and storage…” To that end, ExxonMobil plans to invest $17 billion in lower-emission opportunities from 2022 through 2027, up from a previous target of $15 billion.

In other news, ExxonMobil has awarded a front-end engineering and design contract to develop what it said would be the world’s largest low-carbon hydrogen production facility in Baytown, southeast of Houston. The integrated facility as designed would produce 1 Bcf/day of low-carbon hydrogen, with tentative start up by 2028.

“More than 98% of the associated CO2 produced by the facility, or around 7 mmty, is expected to be captured and permanently stored,” according to ExxonMobil. “The carbon capture and storage network being developed for the project will be made available for use by third-party CO2 emitters in the area in support of their decarbonization efforts.

Affiliate Imperial Oil Ltd. also agreed earlier in January to invest about $560 million to move forward with construction of the largest renewable diesel facility in Canada. The project at Imperial’s Strathcona Refinery is expected to produce 20,000 b/d, primarily from locally sourced feedstocks. 

Meanwhile, ExxonMobil recently started up a polypropylene unit in Baton Rouge, LA, doubling production capacity. A refinery expansion in Beaumont southeast of Houston also is progressing, reaching mechanical completion in 2022. The Beaumont project is the “largest refinery addition in the U.S. in a decade,” Woods noted. “It expands our advantaged Permian crude processing, while providing additional fuels to meet market demand.”

Net income jumped year/year to nearly $13 billion ($3.09/share) in 4Q2022 from $9 billion ($2.08). Upstream earnings rose to $8.2 billion in the final three months of 2022, versus $6.1 billion in the year-earlier quarter and $12.4 billion in 3Q2022. U.S. upstream earnings increased year/year in 4Q2022 to $2.5 billion from $1.77 billion.

The improvement in profits was credited to a 46% increase in natural gas realizations and an increase of nearly 10% in crude realizations. Revenue increased to more than $95 billion in 4Q2022, compared with nearly $84 billion in 4Q2021. The 4Q2022 results were impacted in part by $1.3 billion in additional European taxes on the energy sector.

For 2022, net income increased from a year earlier to $56 billion ($13.26) from $23 billion ($5.39). Full-year revenue jumped to $414 billion from 2021 revenue of $286 billion.