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Oil majors record $37 billion cash flow, biggest in 14 years

By Kingsley Jeremiah, Abuja
16 February 2022   |   2:47 am
ExxonMobil, Chevron, BP, Shell, and TotalEnergies have hit their biggest free cash flow in the last 14 years as the super majors posted combined earnings of $37 billion in three months.

ExxonMobil, Chevron, BP, Shell, and TotalEnergies have hit their biggest free cash flow in the last 14 years as the supermajors posted combined earnings of $37 billion in three months.

With growing oil prices and tight spending coming from the lessons of low oil prices, the multinationals also booked a combined adjusted net income of $31 billion, the highest quarter in more than nine years.

While crude oil prices have rebalanced beyond analysts’ projections, oil companies are smiling to the bank.

The development in Nigeria is different. Being one of the OPEC members that are struggling to meet production quotas, the controversial subsidy payment of over N3 trillion on premium motor spirit erodes gains on the windfall as the Excess Crude Account has not shown any significant improvement.

According to the national oil company, Nigerian National Petroleum Company (NNPC) Limited, $224.29million was earned from crude oil and gas export in August 2021 as against $191.26million in July 2021.

ExxonMobil, Chevron, BP, Shell, and TotalEnergies reported very strong earnings and cash flows for the last quarter of 2021, Bloomberg said in a report linking the positive signs to oil and gas prices rallied and global demand.

While the merger was initially anticipated in the sector due to the severity of the impacts of the Coronavirus pandemic, which had earlier sent oil prices to the negative region, prevailing development signalled a shift to more spending. Recall that the same companies had in 2020 reported a loss of $19 billion.

TotalEnergies’ Chief Executive Officer, Patrick Pouyanne, had noted that while oil supply has been rebalancing, the demand is higher, “rather constrained after years of under-investment”.

BP CEO Bernard Looney had similarly said: “You could see a world where, because of a lack of investment, even though the energy transition is accelerating, oil prices are much, much higher.”

With pressure on fossil fuel investment, the oil majors are spending less as the projected budget did not see a significant increase this year.