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Picture: 123RF/IGOR SHKVARA
Picture: 123RF/IGOR SHKVARA

Houston/London — Big Oil’s first-quarter earnings have shown a split in how companies are positioned to weather the downturn sparked by a slump in oil prices to a four-year low in April.

Investors were focused on whether companies would cut share repurchases, since lower crude prices would leave them with less cash to fund the programmes. Buybacks and dividends are important to investor interest in the industry. US oil producer ExxonMobil and UK-based Shell kept the pace of share buybacks. US-based Chevron and UK-based BP said they would reduce buybacks in the second quarter. The difference speaks to where each company is in its business cycle. Exxon has benefited from prolific production from its Guyana oilfield. A major player in the top US oilfield, the Permian Basin, as well as in Guyana, Exxon increased production by 20% year on year. Both areas are profitable and the company is working to reduce its operating costs, said Exxon CEO Darren Woods.

Oil prices recorded their largest monthly drop since 2021 last week as investors priced in the expected damage to the global economy from US President Donald Trump’s trade policies.

Exxon’s net-debt-to-capital ratio was 7%. It was the only oil company that did not increase net debt during the quarter, said Kim Fustier, head of European oil and gas research at HSBC.

Chevron’s first-quarter oil and gas production was flat compared with the previous year as growth in Kazakhstan and the Permian was offset by loss of production from asset sales. Chevron is attempting to buy into the Guyana play through the acquisition of one of Exxon’s minority partners in the project, Hess.

Exxon repurchased $4.8bn of shares during the first quarter, putting it on track to meet its annual target of $20bn. Chevron said it would reduce buybacks to $2bn-$3.5bn in this quarter, down from $3.9bn in January-March.

Shell impresses, BP disappoints

Shell’s first-quarter earnings beat analyst expectations. The company said it planned to buy back $3.5bn worth of shares. BP missed earnings expectations with a 48% fall in profit to $1.4bn and slashed its share buybacks from $1.8bn to $750m a quarter.

BP is in the midst of a strategy change back towards oil and gas after a failed attempt to move towards a low-carbon energy business model. Shell CEO Wael Sawan said on Friday he would rather buy back more of his company's own shares than bid for BP.

Reuters

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