Exxon Mobil Corp.’s decision to leave Russia and discontinue oil and gas operations will hit earnings, oil production “any stat you chose” between 1% and 2%, its finance chief said on March 2.
Exxon Mobil CFO Kathryn Mikells provided the estimate to Wall Street analysts during its annual financial outlook, without citing a specific metric. She did not offer any details on a potential write-down on its nearly $4.1 billion in assets.
“Of any stat you choose, it’s kind of 1% to 2% of the total denominator, but that's what it is,” Mikells said during an investor call which stressed the company's ability to increase profit and cash flow at oil prices well below the current level.
RELATED:
Exxon Mobil Outlines New Cost Cutting to Drive Profit after Russia Exit
Exxon Mobil holds a 30% stake in an oil and gas production project as part of a consortium that also includes Russia's Rosneft, and Japanese and Indian companies. The group last year pumped an average of 220,000 bbl/d oil.
Western sanctions imposed on Russia for its invasion of Ukraine “will degrade” Exxon Mobil’s ability to retain its assets in the country and “require a discontinuation of operations or suspension,” CEO Darren Woods said.
It was the first time the company suggested the potential to suspend its Russia business. But Woods added: “We are beginning a process to discontinue operations and then developing steps to exit.”
An exit will require time to ensure that the operation is handed over successfully without incidents and maintain its environmental integrity, he said.
“It’s a complicated process. One that is going to require careful management and close coordination with our consortium partners.”
Exxon Mobil could double its pre-pandemic earnings and cash flow by 2027 through new cost cuts and an ongoing reshuffling of its oil and gas properties, said Mikells. The estimate includes an additional $3 billion in cost cuts and an about 25% reduction in its about $41 per unit cost to produce each barrel of oil.
Recommended Reading
Exxon Awards JGC, Technip Energies LNG FEED Contract
2024-09-26 - Technip Energies said Rovuma LNG, located in Mozambique, is expected to have a total production capacity of 18 million tonnes per annum.
Sempra Infrastructure Contracts with Bechtel for Port Arthur LNG Phase 2
2024-07-22 - Sempra Infrastructure has entered into a fixed-price engineering, procurement and construction contract with Bechtel at Sempra’s Port Aurther LNG Phase 2 project.
Texas LNG, EQT Sign a 2-mtpa LNG Tolling Agreement
2024-07-24 - EQT will supply natural gas to Texas LNG, a 4- million tonnes per annum LNG export terminal planned for the Port of Brownsville, Texas.
TotalEnergies Joins Ruwais LNG Project in UAE
2024-07-11 - French energy giant TotalEneriges joined the two-train 9.6 million tonnes per annum Ruwais LNG project in the United Arab Emirates with a 10% interest. The LNG project is expected to start sending out cargos in the second half of 2028.
Cheniere, Galp Sign LNG Agreement for Sabine Pass Expansion
2024-08-05 - Under the 20-year sale and purchase agreement, Galp Trading will purchase 0.5 mtpa from Cheniere Marketing on a free-on-board basis.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.