…Blames Covid-19, global oil low demand
World Oil has reported that the disastrous collapse in crude prices bled Exxon Mobil’s production division, while Covid-19 lockdowns strangled demand for everything from jet fuel to plastic wrap, hobbling the company’s sprawling refining and chemical units.
The report said that Exxon’s woes are emblematic of the broader threats menacing the petroleum industry in what is turning out to be the deepest crisis of its 161-year history.
International titans that raked in record-breaking profits during the first decade of the century have now been reduced to widespread job cuts, belt tightening and heavy borrowing to cover dividends and other outlays.
“Exxon’s 26-cents per-share loss was better than the 64-cent average loss from analysts in a Bloomberg survey,” World Oil said. Last Friday, Chevron Corporation posted its worst quarterly loss in at least three decades and warned that the pandemic may continue to drag on earnings.
It was a downstream disaster, as the worst-ever crude crash came at a vulnerable time for Exxon because it had just embarked on an aggressive, multibillion-dollar rebuilding program.
Two straight quarterly losses, combined with almost $15 billion in annual dividend commitments, will translate into what Goldman Sachs Group Inc. analysts warned will be an unprecedented debt load, World Oil said.
It said that after slashing $10 billion in capital spending and freezing dividends, Chief Executive officer, Darren Woods may be running out of levers to pull. The company is cutting between 5% and 10% of its U.S. employees that are subject to performance evaluations, people familiar with the matter told Bloomberg News in June.
By Chibisi Ohakah, Abuja