Rising oil prices likely to benefit Exxon, but Russia’s exit will come at a cost

It’s a two-pronged oil scenario for ExxonMobil: The company will post a massive first-quarter profit increase thanks to rising oil prices, but it is preparing to lose money on its planned exit from Russia.

Exxon broke the news on Monday ahead of its official quarterly earnings report on April 29, saying that high oil prices significantly boosted its results during the quarter.

But there could also be a $4 billion loss on a drilling project in Russia that is partly owned by the Russian government.

Exxon said it was “continuing efforts to discontinue operations” on the Sakhalin-1 drilling project — which the company vowed last month to shut down due to Russia’s invasion of Ukraine and related sanctions from the West — and is developing steps to exit. of the enterprise.

“Depending on the terms of its exit,” the company said, it may be forced to reduce its investment in the project to a total value of $4 billion.

However, Exxon’s core business is growing.

Rising oil prices alone will boost Exxon’s profit by as much as $2.3 billion compared to the fourth quarter, according to a company report. US oil prices rose by a third during that period.

Higher natural gas prices could add another $400 million, Exxon said.

The earnings boom publicity comes as oil and gas companies face scrutiny, including from the White House, for not doing enough to invest their earnings in new supplies that could ease high prices at the gas pump for consumers.

The CEOs of Exxon and Chevron, along with senior executives from other major oil companies, are due to testify before Congress at a hearing on Wednesday called “Gouged at the gas station: Big Oil and America’s pain at the pump.”