U.S. oil and gas major ExxonMobil booked a profit in the last quarter of 2021 amid a significant increase in revenues driven by a rebound in oil and gas prices.

ExxonMobil on Tuesday announced fourth-quarter 2021 earnings of $8.9 billion, compared to a loss of $20.1 billion in the same period of 2020 when ExxonMobil encountered “the most challenging market conditions ever.” The loss in 4Q 2020 included unfavourable identified items of $20.2 billion, primarily non-cash impairments, and its earnings excluding identified items were $110 million.

The company’s full-year 2021 earnings totalled $23 billion compared to a loss of $22.4 billion in 2020.

Just last week, ExxonMobil’s U.S. rival Chevron posted earnings of $5.1 billion for the fourth quarter of 2021, compared with a loss of $665 million in 4Q 2020. When it comes to its full-year 2021 performance, Chevron recorded earnings of $15.6 billion, compared with a loss of $5.5 billion in 2020.

ExxonMobil revenues came in at $84.97 billion in 4Q 2021 compared to $46.5 billion in 4Q 2020 while Chevron’s revenues in 4Q 2021 were $48 billion, compared to $25 billion in the year-ago period.

ExxonMobil’s capital and exploration expenditures were $5.8 billion in the fourth quarter and $16.6 billion for the full year 2021, in line with guidance.

In the last quarter of 2021, the oil major generated $48 billion of cash flow from operating activities – the highest level since 2012 – which more than covered capital investments, debt reduction, and dividends.

“Our effective pandemic response, focused investments during the down-cycle, and structural cost savings positioned us to realize the full benefits of the market recovery in 2021,” said Darren Woods, chairman and chief executive officer.

Woods added: “Our new streamlined business structure is another example of the actions we are taking to further strengthen our competitive advantages and grow shareholder value. We’ve made great progress in 2021 and our forward plans position us to lead in cash flow and earnings growth, operating performance, and the energy transition.”

As previously reported, ExxonMobil is reorganising its business units and relocating its headquarters from Texas to Houston in a push to improve effectiveness and reduce costs.

ExxonMobil’s oil-equivalent production in the fourth quarter was 3.8 million barrels per day. Excluding entitlement effects, divestments, and government mandates, oil-equivalent production increased 2 per cent versus the prior-year quarter and was also up 2 per cent versus the prior year, driven by demand recovery.

During the quarter, ExxonMobil continued to progress its low cost of supply deepwater developments in Guyana, with estimated recoverable resources increasing to approximately 10 billion oil-equivalent barrels, supported by six commercial discoveries in 2021. The Liza Unity floating production, storage, and offloading vessel arrived in Guyanese waters in October 2021.

In the fourth quarter, the company paid down debt by an additional $9 billion, bringing the full-year reduction to $20 billion, strengthening the balance sheet and returning debt to pre-pandemic levels.

During the fourth quarter, ExxonMobil’s board of directors approved the company’s corporate plan for 2022, with capital spending anticipated to be in the range of $21 billion to $24 billion.

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