Oil giants weigh record production against falling prices

The American oil producers ExxonMobil and Chevron posted lower profits as a fall in commodity prices and weaker refining margins offset record high oil production.
Exxon’s third-quarter net income fell 5.1 per cent year-on-year to $8.6 billion, while at Chevron net income fell 31 per cent to $4.5 billion.
However, the profits beat expectations and outperformed European rivals, as a surge in oil production cushioned the blow from lower fuel margins. Exxon’s shares fell $1.80, or 1.5 per cent, to close at $114.98 in New York. ­Chevron advanced $4.22, or 2.8 per cent, to $153.04.
Exxon and Chevron have focused on expanding oil and gas production as their rivals BP and Shell spent heavily on wind, solar and renewable energy investments that have yet to pay off. Both US oil firms have also benefited from acquisitions of smaller oil producers.
Exxon pumped a record 4.6 million barrels of oil equivalent per day in the third quarter, up more than 24 per cent from a year ago, supported by its $60 billion acquisition of Pioneer Natural Resources and purchase of Denbury, a Texas-based company that uses carbon dioxide to extract oil from old wells.
Chevron posted a 14 per cent increase in third-quarter output to a record 1.61 million barrels of oil equivalent per day, mostly from gains in its US shale business. It added a drilling rig in the Permian Basin last quarter and will begin a production expansion in Kazakhstan next quarter. The company has struck a $53 billion takeover deal for Hess, the American energy company.
Exxon and Chevron pumped record amounts of oil and gas from the Permian Basin, the top US shale field. Exxon’s output from the basin, which sits across Texas and New Mexico, hit a record 1.4 million barrels per day.
Kathryn Mikells, chief financial officer at Exxon, said: “We see tremendous opportunities to invest in profitable growth in both our existing and new businesses.”
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Chevron said its output in the Permian Basin jumped by 22 per cent to a record 950,000 barrels per day, helped by last year’s acquisition of PDC Energy, and is on track to reach one million barrels per day in the field next year.
Their surging production is at risk from uncertain demand, especially in China, a leading oil importer, and the potential that Opec may lift production curbs as soon as next month. The intergovernmental oil producers group is expected to delay a plan to add 180,000 barrels per day amid concerns about weak demand and oversupply.
Chevron expects to close asset sales in Canada, Congo and Alaska in fourth quarter 2024, as part of its plan to divest between $10 billion and $15 billion of assets by 2028. The company is also targeting $2 billion to $3 billion of structural cost reductions from 2024 to the end of 2026.