Exxon mobil, which saw net income rise just 6 per cent last year, will restructure its upstream business
Exxon Mobil Corporation, China's largest publicly traded oil and gas company, is overhauling its upstream oil and gas operations to catch up with the new world's largest oil producer, the United States.
On February 1, the quarterly report released by exxonmobil showed that in the fourth quarter of 2018, exxonmobil achieved revenue of 71.89 billion us dollars, up about 8.1% year on year, falling short of market expectations of 77.28 billion us dollars.
Net profit was $6bn, down 28.4 per cent year-on-year.
It was exxon's only quarterly net profit decline last year.
According to jiemian journalists' statistics of its 2018 quarterly reports, exxonmobil's operating income last year was 290.211 billion us dollars, up 7.7% year on year.
Net profit was $20.89 billion, up about 6 percent from a year earlier.
Exxon's overall growth in the second half was slower than in the first half, hurt by its fourth-quarter performance.
But in the first half of its performance, the growth rate has been the bottom of the international oil majors.
At the end of last year, exxon had yet to recover from weak oil and gas production.
In the fourth quarter of 2018, exxonmobil produced 4.01 million barrels of oil equivalent per day (boe/d), up just 0.5% from a year earlier.
For the full year, exxon mobil produced about 3.8 million barrels a day, down about 3.3% from a year earlier.
Meanwhile, U.S. oil and gas production is climbing.
According to the U.S. energy information administration (EIA), the U.S. produced 10.88 million barrels per day (BPD) of crude oil in 2018. Since August 2018, the U.S. has gradually surpassed Russia, the world's largest oil producer.
To counter the weakness in oil and gas production, exxonmobil is overhauling the upstream oil and gas sector.
On January 31, exxon mobil corp. announced that starting from April 1, will the upstream business restructuring to three new companies, and they are named exxon mobil oil and gas upstream business development company, upstream companies, exxon mobil and exxon mobil upstream integration solutions company, focused on oil and gas assets management, strategy development, and technical and research services in three aspects.
Exxonmobil previously owned seven companies in its upstream business, but the reform has more than halved the number.
"Our focus is to increase overall value by strengthening the upstream business and further integrating it with the downstream and chemical sectors."
Neil Chapman, a senior vice President at exxonmobil, said in a statement that the upstream restructuring was intended to help the company double its profits by 2025 and better coordinate oil and gas production with its logistics and refining operations.
In March 2018, exxonmobil CEO Darren Woods unveiled the company's "" $800 billion over eight years" "investment strategy, which will invest more than $230 billion over the next eight years, doubling annual profits from $15 billion in 2017 to $30 billion in 2025.
But that ambition is unlikely to reverse the disappointment of equity investors in exxon.
According to data compiled by bloomberg, 2018 has been the worst year for U.S. stocks since 1981. Among the worst performers among oil stocks was exxon mobil, down 22% for the year.
It follows a round of consolidation and restructuring of downstream operations.
In the first quarter of 2018, ExxonMobil consolidated its refining and marketing operations into one company, ExxonMobil Fuels&Lubricants.
Exxon said the move would allow the company to generate more cash flow from downstream operations to help it deal with volatility in its upstream business.
Exxon also faces challenges from competitors in the fast-growing U.S. oil and gas market.
On February 1st Chevron Corporation, America's second-biggest oil and gas company, reported a net profit of $3.7 billion for the fourth quarter of 2018, up 19.3% from a year earlier, including a $270m write-down.
In terms of oil and gas production, chevron's total output reached 2.93 million barrels of oil equivalent per day in the fourth quarter, up more than 7 percent year-on-year.
It didn't disclose operating income for the fourth quarter.
"We expect chevron's oil and gas production to grow between 4 and 7 percent in 2018 and continue to do so in 2019."
Chevron's proven oil and gas reserves increased by about 1.46 billion barrels of oil equivalent in 2018, mostly from the Permian basin and liquefied natural gas projects in Australia, according to Michael Wirth, chevron's chief executive.
In December 2018, Barron's recommended the top 10 stocks in the U.S. stock market for 2019. Chevron is the only oil stock in the list.