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ExxonMobil’s chief financial officer said the U.S. oil giant is closely monitoring “quite troubling” geopolitical events in the Middle East and Russia, as the company reported first-quarter earnings that fell short of Wall Street expectations.
Kathryn Mikells told the Financial Times that Exxon’s operations had not been disrupted by escalating tensions in the Middle East, including retaliatory strikes between Israel and Iran, but that the company was continuing to monitor the threats.
“Recent geopolitical events are quite worrying. It is a situation that we are monitoring very closely. Of course, geopolitical events can have an impact on business,” she said in an interview.
Mikells said Exxon was focused on “ensuring the safety of our employees,” but stressed that operations had not really been disrupted.
Exxon benefited from a rise in oil and natural gas prices following Russia’s full-scale invasion of Ukraine in 2022, allowing the company and other oil companies to report record profits. Prices have moderated since then, but Exxon shares have performed strongly this year, rising 18 percent to hit a record high of over $123 a share earlier this week.
On Friday, Exxon reported first-quarter net income of $8.2 billion, down 28 percent from $11.4 billion in the same period last year, driven by lower gas prices and oil refining margins. The company reported earnings per share of $2.06, below consensus expectations of $2.19, according to FactSet.
Mikells blamed the loss in profit on a number of non-cash items, mainly related to tax, inventory and balance sheet adjustments and disposals. She said Exxon’s business is doing well and pointed out that cash flow from operations of $14.7 billion was about $1 billion above consensus.
Exxon is embroiled in an arbitration dispute with its U.S. rival Chevron, which is trying to gain a foothold in the fast-growing Guyana business by acquiring one of Exxon’s partners, Hess, for $53 billion.
Chevron’s proposed deal would give it control of 30 percent of the Stabroek block, one of the largest offshore oil discoveries in decades. Exxon owns 45 percent of the oil reserves off the coast of Guyana.
Mikells reiterated Exxon’s belief that the company had a right of first refusal on Hess’ assets in Guyana. “It’s about affirming our rights. . . and determining the value associated with the transaction for Guyana,” she said.