Low oil prices slice 63% off Exxon Mobil's Q1 earnings

Exxon Mobil Corporation has announced estimated 1Q16 earnings of US$1.8bn, down 63% from the US$4.9bn reported in the same period of last year due to sharp drops in commodity prices and weaker refining margins.

Despite the fall in earnings, the company increased output by 261,000b/d, or 11.5%, during the quarter.

Upstream activities produced a loss of US$76mn, down by US$2.9bn from 1Q15, with earnings from lower liquids and gas realizations falling US$2.6bn.

The slump in earnings was partly offset by strong results in chemicals and solid downstream results, as global gasoline demand remained fairly strong.

Downstream earnings reached US$906mn for the quarter, down US$761mn against 1Q15, while petroleum product sales dropped by 480,000b/d to 5.3Mb/d.

"The organization continues to respond effectively to challenging industry conditions, capturing enhancements to operational performance and creating margin uplift despite low prices," the company's CEO and chairman Rex W. Tillerson said.

"The scale and integrated nature of our cash flow provide competitive advantage and support consistent strategy execution."

Exxon Mobil said its total upstream volumes increased to 4.3Mboe/d, while capital and exploration expenditures were reduced by 33% to US$5.1bn.

Chemical earnings were up 38% to US$1.4bn on stronger margins and higher sales volumes.

The business is capturing increased specialty and commodity product demand, along with significant cost benefits from both gas and liquids cracking advantages on the company's integrated sites, Exxon said.

Exxon Mobil is among the oil majors that have signed up to participate in Mexico's first deepwater auction, scheduled for December 15.

In March, the company signed an LNG agreement with Golar GenPower Brasil Participações, establishing a framework for LNG to be supplied exclusively from ExxonMobil for projects that Golar GenPower is pursuing in Brazil