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ExxonMobil and Chevron are continuing to increase oil production despite forecasts of a looming supply glut and falling prices.
Rising output for the two biggest US oil majors in the third quarter helped soften the impact of a roughly $10-a-barrel dip in spot prices over the past 12 months.
Chevron reported record production of 4.1mn barrels of oil equivalent per day in the third quarter, up by just over a fifth compared with the same period last year.
The integration of Hess, the US energy company that Chevron bought for $53bn in July, added almost half a million barrels a day to production. A further 227mn barrels came from an expansion of operations at Chevron’s US and Kazakhstan operations.
The company said it expects downtime and turnarounds at its upstream division would reduce production by 125,000 b/d in the fourth quarter. A large fire at its El Segundo refinery in California and maintenance at other refining facilities would result in a $400mn to $500mn hit to earnings, Chevron added.
Exxon said quarterly production surpassed 1.7mn oil-equivalent b/d in the Permian basin, the largest oilfield in the US, and 700,000 b/d at its Guyana operation. Overall the company produced 4.8mn barrels of oil per day, up from 4.6mn in the second quarter.
Chevron’s net income stood at $3.5bn, or $1.82 per share, in the three months to September 30, down from $4.5bn a year earlier but beating analysts’ consensus estimates.
Exxon reported earnings of $7.5bn, or $1.76 per share, compared with $8.6bn last year.
Both companies reported higher earnings than in the previous quarter, when net income fell to pandemic-era lows due to plummeting oil prices.
“We delivered the highest earnings per share we’ve had compared to other quarters in a similar oil-price environment,” said Darren Woods, Exxon chief executive.
Both companies are betting that oil demand will remain strong and soak up higher supplies from Opec+ and western oil majors, which have pushed prices close to four-year lows.
The International Energy Agency has forecast that global oil markets could face a 4mn b/d surplus in 2026.
“Demand has been really resilient. It’s really more of a supply story here, a supply dynamic,” said Eimear Bonner, Chevron’s chief financial officer.
“We’re prepared if we see some pressure there. I mean, prices have held up. They are slightly lower, but they’ve held up. But we’re prepared, even if we were to see prices decrease further . . . the portfolio is resilient.”
Bonner said over the medium and long term Chevron saw a positive outlook for oil and gas.
The industry is preparing for lower prices, which will challenge its ability to maintain returns to shareholders.
Chevron, which in February announced it would lay off up to 20 per cent of its workforce by the end of 2026, took a $235mn charge due to severance and other transaction costs related to the Hess acquisition.
Exxon said it had surpassed $14bn in cumulative structural cost savings since 2019 and was on target to achieve its target of more than $18bn in savings by the end of 2030.
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