ExxonMobil reported a fourth-quarter 2023 net income of $7.63 billion, compared with net incomes of $9.1 billion for third-quarter 2023 and $12.75 billion for fourth-quarter 2022. Fourth-quarter 2023 results included unfavorable identified items of $2.3 billion, including a $2 billion impairment as a result of regulatory obstacles in California that have prevented production and distribution assets from coming back online (OGJ Online, Jan. 5, 2024). Impairments were partly offset by favorable tax and divestment-related items.
Furthermore, the company's profit for full-year 2023 amounted to $36 billion, down 35% from $55.7 billion in the year prior. Identified items for the year reduced earnings by $2.3 billion, compared with an unfavorable $2.9 billion impact in 2022. Excluding identified items, earnings decreased $15.8 billion on lower liquids and natural gas realizations, and unfavorable unsettled derivatives mark-to-market effects of $2.4 billion. Higher volume contributions from improved portfolio mix added nearly $1 billion.
Upstream
Upstream fourth-quarter earnings were $4.1 billion, a decrease of $2 billion from this year’s third quarter. Identified items reduced earnings by $2.1 billion this quarter, mainly from the impairment of the idled Santa Ynez Unit assets in California due to regulatory challenges restarting production and distribution. Earnings excluding identified items were $6.3 billion, an increase of $127 million. Higher volumes and improved mix, mainly from Guyana and Permian growth, and stronger gas realizations more than offset lower crude realizations, unfavorable tax impacts, and year-end inventory effects.
Net production in fourth-quarter 2023 was 3.8 million boe/d, an increase of 136,000 boe/d compared to the prior quarter on favorable entitlement effects and growth in Permian and Guyana. Payara, the third Guyana development, started up in November ahead of schedule with production reaching nameplate capacity of 220,000 b/d in mid-January.
ExxonMobil delivered full-year 2023 volumes of 3.7 million boe/d, in line with prior year. While volumes were essentially unchanged vs. prior year, the company achieved a unit earnings improvement of nearly $1/bbl, providing an earnings benefit of roughly $1 billion. The driver was improved mix, essentially a greater proportion of high-margin barrels from assets like the Permian and Guyana and lower costs across the portfolio, ExxonMobil said. Permian and Guyana combined production grew 18% in 2023 versus 2022.
According to ExxonMobil, Yellowtail will be its fourth development in Guyana and the largest development yet, with a nameplate capacity of 250,000 b/d. The company expects to have six Guyana projects online, with a capacity of more than 1.2 million b/d in aggregate, by year-end 2027. These projects have a 30% lower greenhouse gas intensity than the average of the upstream portfolio, with a low cost of supply and strong returns.
Energy products
Energy Products' fourth-quarter earnings totaled $3.2 billion compared with $2.4 billion in the third quarter, an increase of $765 million. A favorable derivatives mark-to-market impact of $1.2 billion and the unwinding of prior quarter unfavorable timing effects more than offset weaker seasonal industry refining margins. Results also improved from favorable tax, year-end inventory impacts, and foreign exchange effects.
Full-year 2023 earnings were $12.1 billion, a decrease of $2.8 billion versus 2022 due to the decline in industry refining margins, higher planned maintenance activities and divestments. These factors were partly offset by stronger trading and marketing margins and higher sales volumes from strong reliability and the start-up of the Beaumont refinery expansion.
Chemicals
Chemical Products' fourth-quarter earnings were $189 million compared to $249 million in the third quarter. Earnings excluding identified items were $577 million for the quarter, an increase of $328 million from the third quarter. Margins improved from lower US feed costs and strong performance product sales. Lower overall seasonal sales were partly offset by new volumes from the recently completed Baytown expansion.
Full-year earnings were $1.6 billion, a decrease of $1.9 billion versus 2022. Lower earnings reflect the overall weaker margin environment from bottom-of-cycle market conditions, higher planned maintenance, and unfavorable sales mix effects.
