Oil giant ExxonMobil's profits more than doubled in the first three months of this year, helped by the increased demand for oil and gas.

The US energy firm said cost-cutting measures also contributed to its record $11.4bn (£9.1bn) first-quarter profits, up from $5.5bn a year earlier.

The jump came despite falling oil prices and a $200m hit from windfall taxes the company paid in Europe.

Rival US oil firm Chevron also reported an increase in its profits.

It made nearly $6.6bn between January and March, up 5% from the same time a year ago. It also paid a $130m "energy profits levy" or windfall tax in the UK.

Next week Shell and BP are both set to report their latest results.

Like other big energy companies Exxon has faced criticism about how much it has returned to shareholders off the back of high oil and gas prices.

It said shareholders would receive $8.1bn including dividends and $375m in share buybacks.

ExxonMobil said the rise in profits included a $3.4bn after-tax reduction to exit Russia.

Bar chart showing ExxonMobil's profits each quarter. In the first three months of 2023, the company made a profit of $11.4bn, more than any other equivalent period the years before.

"We delivered a first-quarter record despite the fact that energy prices and refining margins are softening a bit," chief financial officer Kathryn Mikells told Reuters.

The biggest contributor to the better-than-expected earnings came from strong production growth, driven by the start-up of new offshore developments and refining facilities, she said.

Exxon is currently caught up in a legal case with the European Union - it is suing the EU in an attempt to stop its new windfall tax on oil firms.

It has accused Brussels of exceeding its legal authority, calling the measure "counter-productive" and argued, along with other players in the sector, that the tax would discourage investment.

Peter McNally, an industry analyst at Third Bridge research firm, said Exxon's output had exceeded expectations. The firm's oil and gas production was the highest since 2019.

"The key driver was surging oil production in Canada, but profitability was dragged lower by the collapse in US natural gas prices," he said.

Mr McNally said the company's refining business continued to be a "star performer", delivering earnings of more than $4bn for the fourth consecutive quarter.

Source:
courtesy of BBC NEWS

by Jonathan Josephs & Jemma Dempsey

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