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Editorial-Opinion
Oliver L Campbell : ExxonMobil,
Royal Dutch Shell and BP Year 2012
Financial Results (Unaudited)
Oil prices in 2012 were marginally higher than in 2011. Refinery margins increased, but chemical margins went down. Gains and losses on divestments and the exit from certain business segments cloudy the picture. Each company continues to invest heavily.
Comprehensive Net Income in $million
Company
Date Published
Year 2012
Year 2011
% Increase
(Decrease)
ExxonMobil
01 Feb 2013
44,880
41,060
9.3
Shell
31 Jan 2013
27,178
29,727
(8.6)
BP
05 Feb 2013
11,959
20,605
(42.0)
Production in Barrels per Day of BOE
ExxonMobil
4,239,000
4,506,000
(5.9)
Shell
3,262,000
3,215,000
1.5
BP
2,319,000
2,460,000
(5.7)
Average Price of Liquids
ExxonMobil
N/A
N/A
Shell
N/A
$105.74
BP
$102.10
$101.29
0.8
Capital Expenditure in $million
ExxonMobil
39,799
36,766
8.2
Shell
36,800
31,100
18.3
BP
24.300
31,500
(22.9)
ExxonMobil. Downstream earnings increased by $8.7 billion mainly due to stronger refinery margins of $2.8 billion and divestment gains of $5.9 billion, including a one-off restructuring gain of $5.3 billion in Japan. Upstream earnings decreased by $4.5 billion mainly as a result of lower realisations of $2.4 billion together with higher operating and other expenses of £2.1 billion. Earnings on chemicals were down $0.5 billion.
Shell. Upstream earnings remained unchanged. Higher LNG volumes and realisations were offset by lower natural gas prices in the USA and a reduction in the price for Canadian synthetic crudes. It is noteworthy that the production cost of synthetic crude oil in 2011 was $46 a barrel, compared with an average of $11 a barrel for traditional crudes. Downstream earnings were $1.0 billion higher, mainly due to improved refinery margins and oil product sales which were 1% higher than in 2011. The CEO comments that "Shell is on track for plans we set out early in 2012" but with comprehensive income down 8.6% on 2011, some acceleration is urgently needed. Shell has made divestments of $21 billion and acquisitions of $17 billion in the last three years. The benefits from its divestment of noncore businesses has yet to be realised.
It is notable that, in 2004, Shell's net income was $18.5 billion and ExxonMobil's was $25.3 billion i.e. 37% higher, and in 2012 Shell's was $27.2 billion and ExxonMobil's $44.9 billion i.e. 65% higher. This widening gap may be the result of ExxonMobil's much higher capital expenditure.
BP . The company has made disposals of $38 billion in total since 2010, including $11.4 billion in 2012, to pay for the spill in the Gulf of Mexico. This has impinged on its earning capacity which is reflected in the fall in net income of 42% when compared with 2011. The final cost of the oil spill is still uncertain as litigation is ongoing. BP stress the underlying net income in 2012, after eliminating non operating items, is $17,638 million versus $21,658 million in 2011 i.e. a fall of only 18.6%. The trouble is non operating losses may continue for some time till all claims related to the Gulf of Mexico spill are settled.
Petrobras. The company, which published its results on 4 February, is owned 65% by the state so it does very much what the government says, and this may be to the detriment of private shareholders. Net income fell from $20 billion in 2011 to $11.billion in 2012, mainly due to an $8 billion increase in the cost of sales. After translation losses, comprehensive income in 2012 turned into a loss of $3.5 billion, but the translation losses can turn around in future depending on the US dollar/reais exchange rate. The comprehensive income in reais was positive, but fell from 34.6 billion in 2011 to 21.7 billion in 2012. This drop of 36% was due to increased product imports, the depreciation of the reais, and a 2% drop in production (1,980,000 b/d versus 2,022,000 b/d). Brazil and Venezuela have the same problem that they need to import products to satisfy local demand.
PDVSA. As a state company, its income, less costs paid to third parties, all accrues to the state. The Government Take in 2011 was $52 billion and the average export price was $100.
On the plus side, the average export price in 2012 may be slightly higher, say, $102 and Improved refinery margins should mean CITGO'S net income has increased. However, on the minus side, PDVSA has been buying gasoline components to satisfy gasoline demand locally and an inflated pay roll of over 100,000 must have increased operating costs. Thus it is probable any increase in revenues will have been offset by the latter Venezuela did not publish interim accounts for the first semester of 2012 so we know nothing about the company's progress.
Oliver L Campbell
08.11.13Follow us and post your comments: in
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Petroleumworld News 02/14/2013
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