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Exxon Mobil and Chevron suffer their worst results for the covid-19

Exxon Mobil
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The two main US oil companies, Exxon Mobil and Chevron, recorded the worst results in their recent history in the second quarter of 2020 and together added losses of $ 9.3 billion as a result of the impact of the pandemic of covid-19 on the demand for raw materials.

Between April and June, months in which mobility restrictions were imposed and business in the US and Europe were paralyzed, Exxon Mobil lost $ 1.08 billion and had a 53% drop in sales, to 32.605 million, while its operating activities did not generate cash, as reported this Friday.

For its part, Chevron lost 8,270 million in the same period, largely due to various charges amounting to some 5,200 million, including the deterioration of its business in Venezuela; It had a 65% drop in sales, to 13,494 million, and its operating activities generated only 100 million, according to its accounts.

Red numbers for Exxon and Chevron

This is the second consecutive quarter in the red for Exxon and the first for Chevron, which show low energy prices – the barrel of Texas has recovered slightly but is worth 34% less than at the beginning of the year – and they have undertaken cuts and adjusted their businesses to weather the coronavirus crisis.

Exxon Mobil produced 3.6 million barrels of oil equivalent a day, 7% less than last year, while reducing its natural gas production by 12%, reflecting “economic and government restrictions.”

Its chief executive, Darren Woods, said that “the global pandemic and oversupply conditions have led to low prices, margins and sales volumes,” which the company has attempted to counter by reducing short-term spending and reorganizing the business. , with “additional” adjustment plans that will be reported later.

Chevron produced 2.99 million barrels per day of oil equivalent product, 3% less year-on-year, and its average price was about $ 19, well below the $ 52 paid last year.

“Signs of recovery”

Its chief executive, Michael Wirth, alluded to the “economic impact of the response to the covid-19”, in reference to the activity stop orders, on the demand for crude oil, and warned that although there are “signs of recovery” the economy is far from the “prepademic” levels and the results are expected to continue in red in the third quarter.

“Due to the uncertainty associated with the economic recovery and the large supply of oil and gas, we revised downward our outlook on the price of raw materials, which has resulted in deterioration of assets and other charges,” he added. .

In that sense, he highlighted an important charge of 2.6 billion for the “deterioration” of his investments in Venezuela, where it is the last major US oil company that continues to operate, although the Donald Trump government demanded that it gradually cease its activity in April.

“Uncertainty”

Chevron, citing the “operating environment” and the “uncertainty” about the possibility of recovering its business in Venezuela, assured that “it will continue to fulfill its contractual obligations under current sanctions and the general license, with the intention of returning” to the normality in the future.

It also subtracted from its results 1,800 million associated with the fall in the prices of “commodities”, 780 million for dismissal compensation, which are part of a plan to dismiss about 6,000 employees (13% of its workforce) and about 440 millions for a weakened dollar.

In the accumulated index of the year, these emblematic companies of “Big Oil” already incur losses: Exxon loses 1.69 billion dollars, a hard setback compared to the profits of 5.48 billion in the same period last year, and Chevron loses 4.671 million dollars , compared to the 6,954 million profit of that tranche of 2019.


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