Exxon announces lower profit expectations for fourth quarter amid criticisms of profiteering in Guyana

Exxon has announced that it expects lower profits from the fourth quarter of 2022. In spite of that, 2022 would still be the most profitable year ever for the oil giant. The announcement by Exxon on January 4 comes amid widespread criticisms of the terms of the profit sharing agreement (PSA) between Exxon and Guyana.

According to Bloomberg (media house), Exxon, the largest US oil company, said lower oil and natural gas prices had a negative impact on fourth-quarter earnings of about US$3.7 billion compared with the preceding three months.

The impact from lower gas prices was as much as US$2.4 billion, while oil accounted for as much as US$1.7 billion, the Irving, Texas-based oil giant said.

The losses were mitigated by upstream mark-to-market derivative gains of as much US$1.5 billion.

The data provides an early snapshot of the fourth-quarter results that Exxon is scheduled to release on Jan. 31.

Those results will cap what Wall Street expects to be Exxon’s most profitable year ever. Net income for 2022 will total more than $58 billion, according to the median of analysts’ estimates compiled by Bloomberg.

The announcement by Exxon comes on the heels of the publication of a report written by Arthur Piccolo, an analyst of Latin American affairs.

The report — published by New Americas — makes the case that Exxon is raking in unfairly huge profits from a lopsided PSA between the oil giant and Guyana.

One portion of the reports states, “The deal Guyana signed with Exxon splits the income from this huge oil field 50% to Guyana, 50 % to Exxon. Think that sounds fair. [But that is] Wrong. It is a sucker deal no nation should have ever made. The deal should be 75% to Guyana and 25% to Exxon and indeed Guyana could have negotiated even better if it was serious 80% to Guyana. What is the difference for Guyana? Hundreds of billions of dollars lost to Guyana that Exxon will add to its huge profits for no good reason at all.”