Hit by COVID-19, oil giants Exxon and BP post huge 2020 losses

Irving/London, February 4 - Neftegaz.RU. According to the PTI, Exxon and BP reported staggering losses for 2020 as the pandemic crushed energy demand and undercut oil prices.

Exxon Mobil reported the largest losses in its history - nearly $20.1 billion for the Q4, including more than $19 billion to write down the value of company assets. For the full year, it lost $22.4 billion.

Exxon CEO Darren Woods said:

• Energy consumption collapsed as economies shut down, oil prices hit their lowest point in history, and refining margins fell well below their 10-year lows
• It was the 1st time in memory that we saw simultaneous lows in each of our businesses

Exxon is responding by cutting costs. It expects by 2023 to cut $6 billion in annual spending compared with 2019 levels. Exxon's big Q4 loss contrasted with a profit of $5.7 billion a year earlier. Revenue dropped 31% to $46.5 billion.

The company said it will reduce greenhouse gas emissions from its own operations and has created a division to "commercialize" technology it hopes to develop to capture carbon emissions before they enter the atmosphere - Exxon believes technology can address climate change and save the oil & gas business at the same time.

London-based BP posted a profit of $825 million in the Q4 but still lost $18.1 billion in 2020. The results came after Chevron reported last week that it lost $5.5 billion last year.

BP is also cutting costs. CEO Bernard Looney said in a statement:

• We began reinventing BP, with nearly 10,000 people leaving the company
• We strengthened our finances - taking out costs and closing major divestments

The oil companies are hoping that the rollout of COVID-19 vaccines will mean a return to more normal life for businesses and consumers, which would in turn boost demand for oil and gas. Energy demand slumped last year as the pandemic led to lockdowns and a dramatic drop in energy for uses such as transportation.