Exxon’s dominance may not be good for Exxon

More oil, more problems. Exxon Mobil is barging ahe of rival Chevron. Second-quarter figures reported on Friday showed $520 billion oil giant churned out $9.2 billion of profit, thanks to benefits of its $60 billion deal for Pioneer Natural Resources and record production in oil fields in Texas and offshore South America. company run by Darren Woods is growing its dominance, but that has risks, too. It could use friends at home and abro, and it’s punishing its biggest potential ally.

company’s production has two gems. Output from Permian Basin in Texas and New Mexico is now 1.2 million barrels of oil equivalent a day, or over three times as much as it produced three years ago, thanks to higher production from legacy acreage, and output ded from its deal, which closed in May. Exxon also said cost cuts, previously estimated at $2 billion a year, were exceeding expectations. Likewise, production from nation of Guyana exceeded 630,000 barrels per day, roughly five times as much as three years ago.

Chevron is both smaller, pumping 1.1 million fewer barrels per day, and posted slower growth than Exxon. While rising production in Texas helped, problems in Australia didn’t. bigger snag is its $53 billion deal for Hess. Chevron, which is moving its hequarters from California to Texas, is gunning for a stake in same Guyana oilfield as Exxon. But that deal is in arbitration thanks to an arrangement Exxon claims gives it right of first refusal. resolution of that dispute is set to drag into spring of 2025, at earliest, giving Chevron’s biggest rival anor year to make its life difficult, while also getting ahe.

While growing dominance in rapidly consolidating U.S. oil industry sounds appealing, parts of that could work against Exxon’s long-term interest. Oil’s popularity is alrey limited in Washington, and while that could change in November if Republican nominee Donald Trump is elected, views on antitrust are still nuanced. more Exxon is seen as goliath, less sympathy it may glean.

Plus U.S. oil companies compete against Organization of Petroleum Exporting Countries, where jurisdictions work toger. A bigger Exxon is still a minnow compared to OPEC producers like Saudi Aramco, which pumps out twice as much daily. In any global showdown, a strong U.S. rival is probably a useful Exxon ally.

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Chevron said on Aug. 2 that revenue for second quarter was $51.2 billion, an increase of 5% from same period last year. oil company’s earnings fell 26% to $4.4 billion. same day, Exxon Mobil said revenue was $93.1 billion, an increase of 12% from same quarter a year ago. company’s earnings rose 17% to $9.2 billion. Chevron said on July 31 that an arbitration meeting over Hess’ Guyana assets has been pushed back until May 2025. Chevron agreed to buy Hess in October in a $53 billion deal. Exxon and CNOOC challenged that deal, saying y h a right of first refusal to Hess’ 30% stake in an offshore Guyana oilfield under a joint-operating agreement. Chevron and Hess say this is not case. Under current agreement, Exxon owns a 45% stake and China’s CNOOC 25%. “This matter is too important to rush through – all relevant facts and circumstances must be taken into consideration, and this will take time," said an Exxon spokesperson.