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Exxon's refining and chemicals business shows weakness

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Oil and gas production earnings rise to $6.28 billion

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Exxon plans $20 billion annual share buybacks through 2026

(Adds new headline, details from conference call, share price;

adds graphic)

By Sheila Dang

HOUSTON, Jan 31 (Reuters) - Exxon Mobil ( XOM ) on

Friday posted mixed fourth-quarter results that showed weakness

in its refining and chemicals business, though it beat Wall

Street's profit estimate with higher oil and gas production.

Shares of the No. 1 U.S. oil producer declined 1.5% to

$107.91 in morning trading before recovering some of the losses.

Oil companies were pressured over the past year by lower oil

prices and refining margins, as demand for fuel globally has

lagged expectations. Other oil majors including Chevron ( CVX ) and

Shell

were also hurt by the weaker market, with Chevron ( CVX ) posting a

loss in its refining business

for the first time since 2020.

Exxon's adjusted profit for the fourth quarter was $7.39

billion or $1.67 per share, beating analyst estimates of $1.56,

LSEG data showed.

Earnings from oil and gas production were $6.28 billion, up from

$4.15 billion in the same quarter last year. Production,

including from the Permian basin and lucrative projects in

Guyana, reached 4.6 million barrels of oil equivalent per day,

growing from 4.58 million in the third quarter.

During a conference call with analysts, Exxon CEO Darren

Woods said the company aimed to be efficient with spending plans

and would only pursue investments, including in the low carbon

solutions business, if it was confident it could generate high

returns.

Exxon laid out a

five-year plan

in December to increase project spending to boost oil and

gas output by 18% by 2030.

"We're not going to go ahead with them until we're convinced

that the value is there," Woods said.

Total adjusted earnings for 2024 were $33.46 billion for

2024, down from $38.57 billion the year earlier.

CHEMICAL AND REFINING SLUMP

Exxon's results were helped by favorable tax and year-end

adjustments, said Paul Cheng, an analyst at Scotiabank, in a

research note. Lower corporate costs also enabled the company to

beat profit estimates, said RBC Capital Markets analyst Biraj

Borkhataria.

Earnings from producing gasoline and diesel were $323

million, a large fall from $3.2 billion a year earlier. The

startup of new oil refineries by other companies in Asia and

Africa led to higher global fuel supply, even as demand for

gasoline and diesel lagged expectations.

The refining business remains under pressure as the

additional supply enters the market, Chief Financial Officer

Kathryn Mikells said in an interview.

"That's really what we're watching as we look ahead to

2025," she said.

Adjusted profit from producing chemicals fell 76% from the third

quarter to $215 million due to weaker margins and seasonally

higher expenses, the company said. The figure is the worst since

2019, Borkhataria said.

The company continues to expect a decision by September in

its arbitration challenge to Chevron's ( CVX ) acquisition of oil

producer Hess, Mikells said. If Chevron ( CVX ) proceeds, it would gain

a foothold in Guyana's oil projects.

While the deal has been approved by U.S. regulators, Exxon and

China's CNOOC, Hess' partners in the Guyana oil joint venture,

say they have a contractual first right to buy Hess' stake.

Shareholder returns via buybacks and dividends, a

cornerstone of Big Oil's strategy to court investors, totaled

$36 billion in 2024, up from $32 billion the previous year. The

company plans to repurchase $20 billion in shares annually

through 2026.