It’s the latest company to report its worst year on record during the Covid-19 pandemic.
“The past year presented the most challenging market conditions ExxonMobil has ever experienced,” CEO Darren Woods said on a conference call.
The company has taken cost-cutting and reorganization steps that will help Exxon be in better shape going forward, Woods said. Those moves are expected to save the oil giant $6 billion per year by 2023, compared to before the pandemic. It also slashed capital spending to $21.4 billion, which is 35% lower than initially planned for the year.
Exxon said it should be able to keep paying a dividend to investors, as it did throughout 2020 — a time when other companies discontinued their dividends due to mounting losses.
Digging into the results — and effect of writedowns
Excluding special items, the company reported a fourth-quarter net loss of $20.1 billion. But that was greatly due to the writedowns.
Exxon reported an adjusted income of $110 million excluding special items, a fraction of the $1.8 billion it made a year-earlier, but still the first profitable quarter it recorded for the year.
Exxon also announced it would name a new board member — Tan Sri Wan Zulkiflee Wan Ariffin, the former CEO of the Malaysian oil company Petronas. It said it is also talking to other potential new board members.
The industry faces challenges around the world to cut carbon emissions in order to combat climate change. The United States rejoined the Paris climate accord on President Joe Biden’s first day in office. He also has halted new oil and gas leases on federal lands.
In response to the pressure to reduce carbon, ExxonMobil announced Monday that it had created a new business to commercialize its technology to pull carbon out of the atmosphere, and that it would invest $3 billion on lower emission energy solutions through 2025.
“Carbon capture storage is a critical element to achieving the ambitions of the Paris agreement,” said Woods.
ExxonMobil captured 120 million tons of carbon last year, which Woods said is equivalent to taking more than 25 million passenger vehicles off the road. But Engine No. 1 said counting on carbon capture is the wrong approach for the company’s long-term outlook, and that it should instead make more significant investments in clean energy in order to profitably diversify.
“It is … poor long-term planning to rely almost exclusively on the idea that carbon capture will become scalable and affordable soon enough to allow for continued oil and gas production growth for decades to come under a Paris-compliant trajectory,” the group said.