Downturn for oil majors in fourth quarter 2019 results


Weaker oil prices have hit oil majors in Q4 2019.

The oil industry is facing many challenges - preparing for a decarbonised future, core investment and maintaining high dividends, and recent weaker oil prices have had a substantial impact. .

Oil major BP which has reported underlying replacement cost profit of $2.6bn for the quarter and $10.0bn for the full year, compared to $3.5bn and $12.7bn for the same periods in 2018. Reported profit was down 26% - $19m for the fourth quarter and $4.0bn for the full year. 

Q4 2019 was Bob Dudley’s last quarter as CEO and he described the company as 'fit for the future'.  BP is ahead of its schedule to meet its target of $10bn divestments and other disposals by the end of 2020.

Weaker refining and chemicals margins and negative movements in deferred tax positions have affected Shell which has reported a fall of 83% in income, with Q3 2019 figures of $5.8bn down to Q4 $965m. The full year figures are down 32% from $23bn in 2018 to $15.8bn in 2019.  

The surplus of oil and the weaker price has hit the company's figures but Shell has focussed increasingly on the renewable power business which it has invested about $2.3bn since 2017.

Exxon Mobil announced estimated fourth quarter 2019 earnings of $5.7bn, down 5% from $6bn in the same period in 2018. However, this is an increase of 79% on Q3 2019. The 12-month period earnings were down 31% from $20.8bn to $14bn. “Our operations performed well, while short-term supply length in the downstream and chemicals businesses impacted margins and financial results,” said Darren W. Woods, Chairman and CEO.

Also weathering the fall in oil prices, Total has reported a Q4 2019 adjusted net operating income of $3.87bn which is up from $3.67bn in the previous quarter. The full-year figure is down 9% from $16bn in 2018 to $14.5bn in 2019. In a volatile environment of uncertain hydrocarbon demand,  global economic growth and geopolitical instability, the company's downstream will continue to rely on its diversified portfolio, notably its integrated platforms in Refining & Chemicals as well as its non-cyclical businesses.

Chevron has reported a loss of $6.6bn for the fourth quarter 2019, compared with earnings of $3.7bn  in the fourth quarter 2018.  Full-year 2019 earnings were $2.9bn compared with $14.8bn in 2018. Included in 2019 were net charges for special items of $8.7bn, compared to net charges of $1.2bn for special items in 2018.

Michael K. Wirth, Chevron’s Chairman of the Board and CEO has said that the company is showing capital discipline and has delivered on all its financial priorities. Chevron "also established new performance goals to reduce net greenhouse gas emission intensity from upstream oil and natural gas production," he added.

Meanwhile Phillips 66 announced fourth-quarter 2019 earnings of $736m, compared with $712m in the third quarter of 2019. Excluding special items of $47m  in the fourth quarter, adjusted earnings were $689m, compared with third-quarter adjusted earnings of $1.4bn. Sales and other operating revenues for Q4 2019 were $29m with a year-to-date figure of $107m.

Greg Garland, Chairman and CEO described the market environment as "challenging", with the company's at the start of 2020 being on "operating excellence, executing our growth projects, enhancing returns on existing assets and exercising disciplined capital allocation."