In the midst of a global energy crisis spurred by the Russia Ukraine war and post-pandemic fallout, the oil companies reported record net profits.
Exxon Mobil Corp (XOM.N) posted a $56 billion net profit for 2022, the company said on Tuesday, taking home about $6.3 million per hour last year, and setting not only a company record but a historic high for the Western oil industry.
Oil majors are expected to break their own annual records on high prices and soaring demand, pushing their combined take to near $200 billion. The scale has renewed criticism of the oil industry and sparked calls for more countries to levy windfall profit taxes on the companies.
Exxon’s results far exceeded the then-record $45.2 billion net profit it reported in 2008, when oil hit $142 per barrel, 30% above last year’s average price. Deep cost cuts during the pandemic helped supercharge last year’s earnings.
“Overall earnings and cash flow were up pretty significantly year on year,” Exxon Chief Financial Officer Kathryn Mikells told Reuters. “So that came really from a combination of strong markets, strong throughput, strong production, and really good cost control.”
Exxon said it incurred a $1.3 billion hit to its fourth-quarter earnings from a European Union windfall tax that began in the final quarter and from asset impairments. The company is suing the EU, arguing that the levy exceeds its legal authority.
Excluding charges, profit for the full year was $59.1 billion. The results set up another confrontation with the White House. Companies could increase production but decided instead to “plow those profits into padding the pockets of executives and shareholders,” the White House said in a statement.
Exxon distributed $30 billion in cash to shareholders last year, more than any of its Western rivals, and invested $22.7 billion in the business.
