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ExxonMobil profits rise on refining, chemicals

John Biers
US oil giant ExxonMobil reported higher fourth-quarter profits on better results in its refining and chemical divisions, which offset a drop in its exploration and production results.

US oil giant ExxonMobil Friday reported higher fourth-quarter profits on better results in its refining and chemical divisions, which offset a drop in oil and gas production.

The US's largest oil company said net income for the fourth quarter came in at a $9.95 billion, up 6 percent from the year-earlier period of $9.4 billion.

Exxon's annual 2012 profit came in at $44.9 billion, up 9.3 percent from last year, and the company's highest profit since 2008.

But the results underscored anew the challenge the oil giant faces growing its oil output.

Exxon currently pumps about 4.3 million barrels a day of oil-equivalent. If the company were in OPEC, it would be the cartel's second biggest producer after Saudi Arabia.

But Exxon reported a five percent decline in production compared with the year-earlier quarter. The company cited accounting effects and some unexpected maintenance as a factor.

Asked on an analyst conference call about the drop in natural gas output, secretary and vice president David Rosenthal blamed in part divestments, and also the decision to switch away from some gas output in the US due to low prices.

"I wouldn't look at the year-to-year change as anything to be concerned about or that we weren't able to do ... what we had planned to do," Rosenthal said.

Exxon said overall profits in the exploration and production division, normally the cash cow of oil majors, fell 12 percent to $7.8 billion compared with a year earlier.

Profits from its refining and marketing division came in at $1.8 billion, more than four times the previous year's level. Chemical sector earnings of $958 billion were up 76.4 percent.

Like other major oil companies, Exxon has been boosting capital spending in recent years to respond to rising energy demand in Asia and other emerging economies.

Exxon's 2012 capital spending came in at $39.8 billion, up 8.2 percent from the 2011 level. Rosenthal said about $3 billion of this sum went to 2012 acquisitions.

"ExxonMobil's strong financial performance enables continued investment in new energy supplies, which creates jobs and supports economic expansion," the company said in a statement.

Per-share profits came in at $2.20, compared with analyst forecasts of $2. Total revenues came in at $115.2 billion, roughly matching forecasts.

Exxon purchased 59 million shares of its common stock during the quarter at a total cost of $5.3 billion. Rosenthal told analysts that the company anticipates spending $5 billion in the first quarter on additional share buybacks.

Exxon's shares were flat at $89.94 at midday, 1700 GMT.