ExxonMobil and Chevron Navigate Lower Profits Amid Major Acquisition Moves

In a challenging quarter marked by lower refining margins and declining natural gas prices, ExxonMobil and Chevron, two of the largest US oil companies, reported significant dips in their profits. Despite these setbacks, both companies are in the midst of substantial acquisitions that could reshape their futures.

ExxonMobil announced a profit drop of 28 percent, totaling $8.2 billion, as it approaches the closure of a $60-billion acquisition of shale oil company Pioneer Natural Resources. This deal, aimed at bolstering ExxonMobil’s shale operations, is anticipated to close in the second quarter, following constructive discussions with US antitrust regulators.

Chevron also faced a decline, with profits falling 16 percent to $5.6 billion. The company’s revenue decreased by four percent to $48.7 billion. Chevron is currently navigating its own acquisition challenges with a proposed $53 billion takeover of Hess Corporation, which has hit a snag due to a dispute over rights in the Stabroek Block offshore Guyana—an area crucial to the deal’s value.

The disagreement centers on pre-emption rights that ExxonMobil claims were overlooked, diminishing the value expected from the Hess acquisition. This has led to arbitration, with a resolution expected by the end of the year. Despite these complications, Chevron remains optimistic, though it acknowledges the possibility of exiting the transaction depending on the arbitration outcome.

Both ExxonMobil and Chevron are maintaining robust shareholder payouts, with billions in dividends and stock repurchases, highlighting their financial resilience despite lower earnings.

This period of strategic acquisitions and market adjustments illustrates the oil giants’ efforts to adapt to fluctuating market conditions and regulatory environments while striving to maximize shareholder value and expand their operational scope.