Exxon profit falls 40% as cheap oil pain lingers

By Matt Egan

Depressed oil prices are keeping the heat on Exxon at a time when the oil behemoth’s longtime CEO Rex Tillerson has left to join the Trump administration.

ExxonMobil, the world’s largest public oil company, revealed on Tuesday a 40% decline in fourth-quarter profits.

Darren Woods, who became CEO after Tillerson stepped down to become secretary of state, blamed the “prolonged downturn in commodity prices.”

The company’s bottom line also took a hit from writing down the value of undeveloped natural gas assets in the Rocky Mountains region by almost $2 billion.

Despite the disappointing results from the last three months, there are signs that Exxon may have begun to turn the corner. For the first time since mid-2014, Exxon’s revenue didn’t decline last quarter. But the 2% bump in revenue to $61 billion was less than Wall Street had been anticipating.

Oil prices have roughly doubled since bottoming last February at $26 a barrel. But they are still about half of their 2014 peak due to a continued supply glut caused largely by the U.S. shale oil boom.

Under Tillerson, Exxon was slow to take advantage of the surge of new U.S. oil resources as it focused on mega deals overseas instead. But earlier this month Exxon purchased $5.6 billion of assets in a New Mexico section of the Permian Basin, a hotbed of shale oil development.

Exxon management may get quizzed by analysts during the company’s conference call about how it is being impacted by the Trump administration’s travel ban on Iraq and six other majority-Muslim nations. Exxon has a joint venture in southern Iraq and a controversial deal to explore for oil fields in the semi-autonomous Kurdish region in the north.

Exxon is also anxiously waiting to see if President Trump lifts sanctions on Russia. Tillerson, who has deep ties to Russia, reached a 2011 deal to explore for oil in the largely untouched Russian Arctic. But development was frozen by the U.S. and European sanctions imposed on Russia in 2014. Exxon could be one of the big winners of improved relations between Washington and Moscow.