Back in 2020, the world market had been hit by the unexpected and unprecedented emergence of the COVID-19 pandemic. So devastating was its impact that ExxonMobil Corporation recorded a US$22 billion loss, its biggest in four decades.
Just two years later, however, the US oil major has boosted its performance, recording its highest quarterly earnings ever, totalling almost US$20 billion for the third quarter of this year.
On the heels of this performance, ExxonMobil has asked shareholders to trust that it will fight back prevailing inflationary pressures and honour its promise of US$9 billion in cost savings.
Such an assurance was given by the company’s Chair and Chief Executive Officer (CEO), Darren Woods.
During the third quarter earnings call on Friday, Woods acknowledged that the company is not completely insulated from the current market forces as the impact is being felt across several of its activities.
Woods said, “As you will recall, when we went through the pandemic in the downturn, we took a very concerted effort to work with our contracting partners and the recognition that we would be back, that we would longer term, be running rigs and putting pipe in the ground. And so, we tried to enter into contracts that reflected that longer term objective, and that has helped manage some of the inflationary impacts.”
Such efforts to become more efficient and more effective in the marketplace and reduce costs are having a significant impact, the Exxon Chair asserted. He also noted that for the reporting period, the company recorded US$$6.4 billion of structural savings. Woods said the company therefore remains well on its way to meeting the objective set by end of 2023 of $9 billion in structural savings.
The CEO said, “… So we’ve challenged ourselves to deliver on our expense budget for the year and to offset inflation. The organisation is doing a pretty good job at that. I think we’ll be within rounding with respect to that.”
For 2023, Woods said Exxon intends to be very focused on using the opportunities that have been created through the restructuring of its business to offset those inflationary pressures.
In this regard, Exxon is well suited to mitigate the impact of inflationary pressures on its upcoming Guyana project, Uaru, which its partner, Hess, said could carry a high price tag.
