Mixed results for oil majors

Two major energy companies reported mixed fortunes in their quarterly earnings yesterday. Gazprom posted a 33 per cent rise in profit for the third quarter, compared with the same period a year earlier, after the Russian gas export monopoly paid less tax and the rouble weakened against the dollar. ExxonMobil, the largest US company, posted a smaller decline in fourth-quarter profit than analysts estimated as gains in oil prices and output softened the impact of slumping demand for diesel and petrol.

Gazprom's net income jumped to 174.6 billion roubles (Dh21.12bn) from 131.7bn roubles a year earlier, it reported. "The main reason for the unexpected increase was the effective corporate profit tax rate," said Alexander Nazarov, an analyst at IFK Metropol. "In the third quarter of 2009, the rate was 20 per cent, while the previous year it was 35 per cent." Sales at Gazprom, the world's largest producer of natural gas, fell 8.1 per cent to 770.8bn roubles for the quarter. The slump in European prices outweighed a 19 per cent increase in volumes shipped to the region and an increase in domestic prices.

Exxon said net income fell 23 per cent to US$6.05bn (Dh22.22bn) from $7.82bn a year earlier. Oil and natural gas production climbed 1.6 per cent to the equivalent of 4.18 million barrels of crude a day, helping Exxon take advantage of the biggest yearly gain in oil futures since 1999. The recession eroded demand for motor fuel, meaning losses of more than $2m a day at Exxon refineries. Full-year profit fell below $20bn and the quarterly decline in profit was the fifth straight for the company. Revenue rose 6.1 per cent to $89.8bn.

"They still have incredible cash flows because they're making plenty of money in their oil business," said Paul Sutherland at Financial and Investment Group. * Bloomberg