Exxon Mobil Corp and BP Plc joined a growing list of global oil companies reporting a substantial erosion in their earnings, as crumbling oil and natural gas prices begin to eat into their profits.
BP said its fourth quarter earning fell 91 percent and Exxon reported its steepest annual profit decline in more than a decade after average crude prices went into an almost free fall in the past months and dropped nearly 40 percent.
PetroChina Co., China’s biggest oil major, has said it expects 2015 profit to fall at least 60 percent. Chevron Corp. reported its first quarterly loss since 2002 and Royal Dutch Shell Plc said it expects its fourth-quarter profit to drop at least 42 percent.
Exxon’s net income fell by more than half to $16.2 billion for the full year, while BP said it lost $6.5 billion in 2015
“While our financial results reflect the challenging environment, we remain focused on the business fundamentals, including project execution and effective cost management,” said Rex W. Tillerson, Exxon’s chairman and chief executive officer.
ExxonMobil completed six major Upstream projects during the year and achieved its full-year plan to produce 4.1 million oil-equivalent barrels per day. These new developments in Canada, Indonesia, Norway, the United States and West Africa added 300,000 oil-equivalent barrels per day of working interest production capacity.
BP, still battling the fallout of billions of dollars of costs from the oil spill in the Gulf of Mexico five years ago said it would cut 7,000 jobs by 2017.
“Despite strong operational performance and growing cost reductions, the lower underlying result was predominantly driven by the impact of steeply lower oil and gas prices on BP’s upstream segment, which reported a pre-tax loss for the quarter. This was partially offset by a strong set of counter-cyclical results from the downstream segment,” the company said in a statement.