Oil multinationals are feeling the sluggish economy: Exxon has not been making any money since the beginning of the year

Oil multinationals are feeling the sluggish economy: Exxon has not been making any money since the beginning of the year

Economies around the world are weakening. In view of the corona pandemic, the losses are sometimes considerable. As a result, the demand for oil falls. The industry giants are writing deep red numbers and are fighting the crisis with austerity programs.

The corona pandemic continues to affect the largest US oil multinationals ExxonMobil and Chevron. In the third quarter, both groups suffered heavy losses and had to cope with further heavy business losses. Both took a good 30 percent less in the summer and are fighting the crisis with massive austerity programs. Even if the demand for oil has recovered a little, the global economy will continue to suffer from the consequences of the pandemic, said Exxon boss Darren Woods, summarizing the situation.

ExxonMobil 27,61

US industry leader Exxon got into the red with 680 million US dollars (around 582 million euros) in the three months to the end of September, as the company announced. A year ago Exxon had earned 3.2 billion dollars, but since the Corona crisis, the Texan company has only made a loss – it was the third quarterly loss in a row. The company has not yet earned a dollar this year.

Share price halved

Exxon’s sales fell 29 percent year-over-year to 46.2 billion. The company also warned of possible write-offs of up to $ 30 billion. In the gas business, there is a risk of a significant correction in assets. Since the beginning of the year, the price has fallen by more than 50 percent.

In light of the difficult situation, Exxon is cutting its costs further. Investments in equipment and exploration and production projects have been cut by $ 6 billion to $ 16.6 billion year-to-date. In the coming year, they are expected to decrease from the originally planned $ 23 billion to between 16 and 19 billion dollars.

The day before, Exxon had announced the shedding of around 1900 US jobs and warned that the global workforce could be reduced by around 15 percent by the end of 2022. At the end of 2019, the group had around 88,000 employees including freelancers.

The second largest US oil company Chevron fell in the last quarter a minus of 207 million dollars. For comparison: a year ago there were still profits of 2.6 billion dollars on the books. Overall, revenues collapsed by a good 30 percent to $ 24.5 billion. The weak numbers mainly reflected the effects of Covid-19, said CEO Michael Wirth. The global economy continues to run at a lower level than before the pandemic, which is putting pressure on demand.

Chevron is also fighting the crisis with drastic cost cuts – equipment investments fell 48 percent and operating expenses fell 12 percent. The group is about to lay off 10 to 15 percent of its 45,000 employees. Since the beginning of the year, the paper has already given way by 40 percent.

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Author: Killian Jones
Graduated From Princeton University.He has been at the USTV since 2017.
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