Exxon Mobil Corp. released its first-quarter 2022 earnings estimate of $5.5 billion, compared with $8.9 billion in fourth-quarter 2021. Results included an unfavorable identified item of $3.4 billion associated with the company’s planned exit from Sakhalin-1 in northeastern Russia in response to Russia’s war in Ukraine (OGJ Online, Mar. 1, 2022). First-quarter capital and exploration expenditures were $4.9 billion.
Excluding identified items, earnings of $8.8 billion were slightly higher than the prior quarter, as higher industry prices and margins and reduced expenses were largely offset by a temporary reduction in volumes, unfavorable mark-to-market derivative effects, and price timing impacts.
First-quarter 2022 upstream earnings were $4.5 billion compared with $6.1 billion in fourth-quarter 2021. Excluding identified items, earnings were $7.7 billion, an increase of $1.1 billion from the previous quarter, primarily due to higher liquids prices and lower expenses, partly offset by lower volumes driven by weather-related impacts, fewer days in the quarter, price entitlement effects, and divestments. Average realizations for crude oil increased 28%.
First-quarter 2022 downstream earnings were $300 million compared with $1.5 billion in fourth-quarter 2021. Improved industry fuels refining margins and lower expenses were partially offset by lower basestock margins and lower volumes, driven by higher turnaround activity. Results were also impacted by unfavorable mark-to-market impacts and price timing effects that are expected to reverse or unwind over time.
Global refining margins improved from the fourth quarter despite softening seasonal demand, higher natural gas prices in Europe, and lagging jet demand recovery. By the end of the first quarter, industry margins improved to levels above the 10-year range, with the tight supply/demand balance expected to persist. While average basestock margins declined from the prior quarter, pricing in April is catching up to rising feedstock costs.
First-quarter 2022 chemical earnings were $1.4 billion compared with $1.9 billion in fourth-quarter 2021.
Production was 3.7 MMboe/d, down 4% from fourth-quarter 2021 due to weather-related unscheduled downtime, planned maintenance, lower entitlements associated with higher prices, and divestments. Excluding entitlement effects, government mandates, and divestments, oil-equivalent production was down 2%.
Liquids volumes were down 119,000 b/d, while natural gas volumes were down 132 MMcfd. By the end of the quarter, production had fully recovered from weather-related impacts.
Production in the Permian basin reached 560,000 b/d at the end of the quarter. The company remains on track to deliver a production increase of 25% this year versus full-year 2021, and to eliminate routine flaring by yearend.