ExxonMobil reported a 2020 loss of $22bn, against profits of more than $14bn the previous year. This is the first ever annual loss registered by the company in at least last 40 years.

The company announced an estimated fourth quarter 2020 loss of $20.1 billion, or $4.70 per share assuming dilution. Fourth quarter capital and exploration expenditures were $4.8 billion, bringing full-year spending to $21.4 billion, $9.8 billion lower than the prior year.

“The past year presented the most challenging market conditions ExxonMobil has ever experienced,” said Darren W. Woods, Chairman and CEO.

“While the effects of the pandemic significantly impacted our 2020 results, our previously executed strategic initiatives and reorganizations enabled us to respond decisively to permanently improve our cost structure, drive greater efficiencies across our businesses, and emerge a stronger company. These improvements are expected to deliver structural expense savings of $6 billion per year by 2023, relative to 2019.”

“We remain focused on increasing long-term value for our shareholders by investing in our highest-return assets, preserving the strength of the balance sheet, and paying a reliable dividend. We’ve built a flexible capital program that is robust to a range of market scenarios and focused on our highest-return opportunities to drive greater cash flow, cover the dividend, and increase the earnings potential of our business in the near and longer term.”

According to the company, the fourth quarter earnings of $691 million for chemical business represent the best quarterly result since 2018, underpinned by strong safety and operational performance, and advantages from integration with refining. Chemical also achieved best-ever full-year 2020 personnel safety, process safety, and reliability performance.

“Chemical sales volumes were even with the third quarter, while industry margins strengthened on continued strong packaging demand, automotive and durables market recovery and industry supply disruptions,” the release said adding that it achieved record full-year polyethylene sales driven by strong performance from recent investments and growing demand for the company's high-value performance products.

America’s biggest oil producer exceeded its commitments to reduce capital and cash operating expenses. Full-year 2020 capital spending of $21.4 billion was nearly $12 billion, or 35 percent, lower than the initial $33 billion plan, and $2 billion below the revised $23 billion plan, reflecting project pacing and optimization, increased efficiencies, and lower market prices. Cash operating expenses for the year were 15 percent lower than 2019, capturing savings from increased efficiencies, reduced activity, and lower energy costs.

Driven by the growing strength of ExxonMobil's investment portfolio, less strategic assets were removed from the company's Upstream development plan, including certain dry gas resources in the United States, western Canada and Argentina. Total non-cash, after-tax fourth quarter impairment charges were $19.3 billion.

As a result of ExxonMobil's ongoing country-by-country workforce assessments and associated reductions, the company's fourth quarter results include an identified item for after-tax severance charges of $326 million.

In 2020, ExxonMobil reduced annual cash operating expenses by $8 billion, of which $3 billion are structural reductions. The Company expects to generate additional annual savings of $3 billion by 2023, resulting in total structural annual expense reductions of $6 billion, including savings from a global workforce reduction.

The company expects 2021 cash flow to cover capital expenditures while maintaining the dividend and a strong balance sheet.