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Global energy producers report lower Q1 results amid volatile crude prices

by Başak Ceylan -
  • 07/05/2019 (14:07)
Many major global oil and petrochemical producers saw their earnings fall in the first quarter of 2019. The results reflected the weaker crude oil prices at the start of the quarter, along with the rising concerns over global trade and the looming risk of an economic slowdown.

Oil market off to shaky start in 2019

Despite showing a jump of more than 50% from their December bottom, West Texas crude oil prices averaged around $55/bbl in Q1. However, the figure was more than 11% lower from a year ago period, according to the weekly average data from ChemOrbis Price Wizard.

Dow expects headwinds in Q2

The US-based producer Dow Chemical posted a sharp year-on-year decline of around 24% in its quarterly operating EBITDA. Standing at $1.9 billion, the lower figure was attributed to margin compression in PE and MEG as well as lower equity earnings.

Dow also said in its forward-looking statement that they expect some headwinds in the second quarter due to seasonal planned turnaround and maintenance activity.

Westlake points at weak Chinese demand

Westlake Chemical Corporation’s net income of $72 million for the three months ended March decreased by $215 million compared to first quarter 2018 net income of $287 million.

The company attributed the 50% plunge in its net income to a difficult pricing environment during the first quarter, which reflected weaker Chinese demand amid international trade tensions and a decline in global oil prices in late 2018.

Chevron and Exxon miss estimates

The two US-based energy giants reported a combined loss of more than $3.3 billion in their net income for the first quarter, mostly due to lower margins in refining and chemicals businesses.

Chevron reported earnings of $2.6 billion, compared with $3.6 billion in the first quarter of 2018 while the company’s international downstream operations earned just $35 million in first quarter 2019, compared with $286 million a year earlier.

For the first quarter of 2019, ExxonMobil’s net income stood at $2.35 billion versus $4.65 billion a year ago. ExxonMobil’s downstream operations took a harder hit than Chevron’s and reported a loss of $256 million versus a profit of $940 million a year ago amid higher scheduled maintenance.

BP’s profit lower by $200 million from Q1 2018

The British oil giant’s replacement cost profit before interest and tax in its upstream business was down to $2.4 billion, compared with the profit of $2.6 billion a year earlier and $3.5 billion in the final three months of 2018. The company said that the impact of turnaround activities in the US Gulf of Mexico had an adverse impact on its quarterly earnings.

Shell tops estimates, warns of upcoming maintenances

Royal Dutch Shell reported a small decrease of around 2% in its first quarter profit at $5.4 billion, beating forecasts of $4.5 billion.

Lower chemicals and refining margins, as well as a decrease in oil prices were partly offset by stronger contributions from trading.

Compared with the first quarter of 2018, the company’s downstream earnings were 10% lower at $1.59 billion. Chemicals earnings saw a larger decrease of around 35% from year ago period at $451 million, reflecting lower intermediates and base chemicals margins.

The company also stated in its outlook at that manufacturing availability is expected to decrease in the second quarter as a result of higher maintenance activities at its chemical plants.

LyondellBasell suffers 34% plunge in net profit

LyondellBasell Industries announced net income for the first quarter 2019 of $800 million, down by 34% from $1.23 billion in the same quarter of 2018.

The company’s olefins results in Americas decreased $130 million compared with the prior period. Polyolefins results were also down nearly $30 million primarily due to decreases in margin for both PE and PP.

LyondellBasell’s olefins and polyolefins segment for Europe, Asia and International region also reported a year-on-year decline of 34% in its operating income. The company said that the increase in its volume and margin following the completion of a planned maintenance at its Wesseling cracker was offset by several unplanned maintenances in the first quarter.

Borouge 3 turnaround takes toll in Borealis’ profit

Borealis announced a net profit of €200 million for the first quarter of 2019, compared to €240 million in the same quarter of 2018. Lower results were driven by lower integrated polyolefin margins in Europe and lower contribution from its joint venture with ADNOC, Borouge.

Borouge began a three-month long turnaround at its complex in Ruwais, the UAE in January. The shutdown affected operations at its 1.5 million tons/year steam cracker, as well as its PE and PP plants at the complex.
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