The profits of the five major Western energy giants all shrank in the first quarter, which seems to indicate that the two-year period of oil and gas profits triggered by the Russia-Ukraine conflict is coming to an end.
It's off to a bad start! With the release of the first quarter financial reports, the five major Western energy giants all showed a "bad start", and their profits in the first quarter all fell by double digits, of which BP was almost "cut in half". This seems to indicate from the side that the two-year period of oil and gas profits triggered by the Russia-Ukraine conflict is coming to an end. In the future, the five giants will focus on cost control, operational efficiency and core business.
BP's net profit is close to "halving" year-on-year
BP's adjusted net profit fell to US$2.72 billion in the first quarter, close to halving US$4.96 billion in the same period last year and down 10% from US$2.99 billion in the fourth quarter of last year, affected by lower oil and gas prices and significantly lower fuel margins. Operating cash flow was $7.4 billion and net debt increased to $24.0 billion from $20.9 billion at the end of the fourth quarter of last year. Even so, bp reaffirmed its commitment to buy back $3.5 billion in shares in the first half of the year, including $1.75 billion in the first quarter, which was essentially the same as in previous quarters.
At the same time, BP continued to keep its dividend level unchanged, emphasizing that it will return at least $14 billion to shareholders by the end of 2025, as long as oil and gas prices remain largely stable. In response to the performance in the first quarter of this year, bp CEO O'Murray pointed out that the aftermath of last year's energy crisis in Europe has not subsided, and natural gas prices have fallen this year, but bp's performance has been resilient and will continue to simplify its business in the future, saving $2 billion in cash costs by the end of 2026. "At the end of last year, our manageable cash costs were approximately $22.6 billion, which will be achieved across all business areas. Going forward, bp will focus on its portfolio and drive digital transformation. ”
ExxonMobil earnings down 28%
ExxonMobil's net profit in the first quarter was $8.22 billion, down 28% from $11.43 billion in the same period last year; revenue was 83.083 billion US dollars, a decrease of 4.02% from 86.564 billion US dollars in the same period last year; cash flow from operating activities of $14.7 billion; Net production fell slightly, to 2.78 million b/d of oil equivalent from 3.83 million b/d in the same period last year; Lower refining margins led to a 67% decline in fuel profit to $1.38 billion from $4.18 billion in the year-ago quarter.
Despite the decline in earnings, it was still the second-highest first-quarter earnings in the last 10 years. In this regard, ExxonMobil CEO Woodrun said that the continued growth of high-quality assets such as Guyana led to the first-quarter results, and the year-on-year decline in earnings was mainly due to non-cash taxes and inventory adjustments. ExxonMobil invested nearly $6 billion in capital and exploration operations in the first quarter. "We are extending our business reach into new, high-value, high-growth markets, leveraging our core competitive advantages to capture greater value." "We plan to drive earnings growth by expanding our operations in the Permian Basin, Guyana and Brazil," Woodren said. ExxonMobil paid a first-quarter shareholder dividend of $6.8 billion, including a $3.8 billion dividend and $3 billion in share repurchases. ExxonMobil said it has raised its dividend level for 41 consecutive years and will continue to increase its dividend in the future.
TotalEnergies earnings down 22%
TotalEnergies' first-quarter profit fell 22% year-on-year to $5.11 billion, with cash flow of $8.2 billion, partially offset by a sharp decline in natural gas margins from refining margins. At the same time, oil and gas production in the first quarter was about 2.46 million b/d, thanks to a 6% quarter-on-quarter increase in liquefied natural gas (LNG) production. Jean-Pierre Sbraire, chief financial officer of TotalEnergies, pointed out that the 35% drop in gas prices in Europe was due to the warm winter and high gas storage levels.
E&P net operating profit of approximately US$2.6 billion in the first quarter, cash flow of US$4.5 billion, and upstream production costs of less than US$5 per barrel of oil equivalent; Downstream net operating profit of US$1.2 billion and cash flow of US$1.8 billion; Consolidated LNG business achieved net operating profit of US$1.2 billion and cash flow of US$1.3 billion; The integrated power business achieved a net operating profit of $600 million and cash flow of $700 million, with an average return on capital of 10%. TotalEnergies will continue to increase its dividends, with its first interim dividend of €0.79 per share in 2024, up almost 7% year-on-year, and will launch a $2 billion share buyback in the second quarter. TotalEnergies CEO Yanlei Pan said that a New York listing is being seriously considered.
Shell's profit fell 19% year-on-year
Shell's first-quarter profit fell 19% year-on-year to $7.7 billion, operating cash flow fell 6% year-on-year to $13.3 billion, and net debt fell nearly 10% year-on-year to $40.5 billion from $44.2 billion in the same period last year. The Chemicals segment, which includes refining margins and oil trading, reported adjusted earnings of $2.8 billion in the first quarter, a significant increase from the prior quarter. Natural gas was profitable in the first quarter, accounting for 40% of total quarterly earnings.
Shell CEO Wael Savan said that continued cost cuts and a focus on core businesses have made Shell's balance sheet very healthy, with shareholder returns at the high end of the guidance range and not affecting the overall financial balance. Shell initiated a $3.5 billion share buyback in the first quarter and plans to close it in the second quarter. The company is now under pressure to increase its dividend payout and move its listing location from London to New York, aiming to close the valuation gap with its U.S. peers. "For the 10th consecutive quarter, we have repurchased more than $3 billion in shares, demonstrating the stability of our performance." "The focus remains on improving performance until the end of 2025. In fact, there are a number of initiatives we can take to unlock more value than just going public. ”
Chevron's net profit decreased by 16.3%
Chevron's net profit in the first quarter was $5.5 billion, down 16.3% from $6.57 billion in the same period last year. revenue was US$48.72 billion, down 4.1% from US$50.79 billion in the same period last year; Total oil and gas production rose 12% year-on-year to 3.35 million barrels of oil equivalent, the highest level ever. In the first quarter, U.S. refining profits fell more than 50% to $453 million, while international refining profits plummeted nearly 60% to $330 million. Meanwhile, capital expenditures in the first quarter were $4.1 billion, up 37% from $3.0 billion in the year-ago quarter. Mike Wirth, Chevron's Chairman and Chief Executive Officer, said, "We have had another strong quarter and delivered strong cash returns to our shareholders. ”
It is reported that Chevron paid $3 billion in dividends in the first quarter, an increase of 8% from the fourth quarter of last year. At the same time, nearly $3 billion of shares were repurchased in the first quarter, and return on capital is also reduced to 12.4% from 14.6% in the same period last year. Like ExxonMobil, Chevron's stock price has continued to rise so far this year, rising 11% in the first quarter. While there are doubts about the ability of the two largest U.S. oil and gas companies to maintain consistently high levels of profitability, they do continue to generate significant cash flow as the boost to oil prices from geopolitical conflicts remains effective and global energy demand remains high.
Original title: 5 Western energy giants "don't get off to a good start" this year
Text丨Reporter Wang Lin