OPEC

The time of superprofits seems far away. After poor results this summer, the oil majors once again reported sharply declining results on 3^e quarter 2023. This is the case of the Italian giant Eni, which saw its net profit fall by 67% to 1.91 billion euros. OAcross the Atlantic, Chevron also announced this Friday, October 27, a net profit down 42% over one year, to $6.53 billion, and a turnover down 18.3%, to 51.9 billions of dollars.

Its competitor ExxonMobil is not doing any better. The giant oil and gas company posted a net profit of $9.07 billion, compared to a record $19.66 billion a year earlier. Turnover fell from $112 billion in the third quarter of 2022 to $90.76 billion over the same period of the current financial year. Only TotalEnergies held its own, with a stable profit of $6.7 billion.

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Declining but “solid” results

However, the markets do not seem particularly feverish. After the two communications of the day,Chevron shares fell 1.1% in electronic trading preceding the opening of the New York Stock Exchange. ExxonMobil shares rose 0.14%. The results of the hydrocarbon giants are above all returning to a “normal” trajectory, after a year 2022 driven by the surge in energy prices linked to the war in Ukraine. Conversely, since the start of 2023, the price of hydrocarbons has been falling. This is why Darren Woods, boss of the ExxonMobil group, was nevertheless satisfied with his group’s results, believing that it had produced “another quarter of solid operational performance, results and cash flow”.

However, it is difficult to imagine repeating last year’s record results. The five Western majors together raked in no less than $151 billion in profits a year ago. The Saudi oil giant Aramco alone even posted a profit of $161 billion in profits in 2022.

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The weight of instability in the Middle East

This would not take into account the situation in the Middle East. Latest episode:he prices of the two global crude benchmarks are up this Friday, “due to American airstrikes in Syria which have increased tensions in the Middle East” and warnings from Iran to the United States, explain DNB analysts .

The oil market’s attention “is particularly focused on Iran, which could decide to intervene in the conflict”, adds Barbara Lambrecht, analyst at Commerzbank. No wonder, because the country “increased its daily oil production by around 500,000 barrels in the first half of the year and again represents 10% of OPEC production” (the Organization of the Petroleum Exporting Countries). But cand influx of black gold proved decisive in containing prices in a context of tight supply following the reductions in production and exports by certain members of OPEC and their allies. Investors therefore fear a further tightening of supply in the event of Tehran’s involvement in the war between Israel and Hamas. But which could result in a new surge in prices… and super profits in the months to come?

Billions of investments

If the markets have not punished ExxonMobil and Chevron for their poor results, they do not seem to have rewarded them excessively for their recent acquisitions either. These are, however, substantial. After the American crude oil and natural gas producer PDC, Chevron announced a few days ago the purchase of its compatriot Hess (gas and oil), for $53 billion.
For its part, ExxonMobil has focused on the “greening” of its activity and has just triggered a $60 billion transaction to acquire Pioneer Natural Resources (shale oil and gas). This transaction should “increase production in the Permian Basin in the United States, strengthen energy security and accelerate Pioneer’s path to carbon neutrality,” the press release specifies. And this from 2035. The group also announced in July the acquisition of Denbury, an American company specializing in CO capture.₂ valued at $4.9 billion. The transaction is expected to be finalized at the beginning of November and is intended to strengthen its Low Carbon Solutions branch by offering the Gulf Coast industry a capacity to reduce 100 million tonnes of CO₂.

(with AFP)