U.S. Big Oil giants Exxon Mobil and Chevron said May 2 they will steadfastly maintain their spending and stock buyback plans in the face of tariff uncertainty and lower oil prices—despite reporting declining quarterly earnings year over year.
The straighter paths of Exxon and Chevron, which have maintained their emphasis on fossil fuels more consistently, differ from those of their European counterparts, Shell and BP, which are now retrenching back to oil and gas after investing more heartily in renewable energy in recent years. However, Shell announced May 2 it still plans $3.5 billion in second-quarter buybacks, while BP, which is under greater financial distress, is scaling back buybacks this year.
Even though tariffs are expected to add to certain costs and OPEC is increasing its production volumes—further weighing on oil prices—Exxon Mobil chairman and CEO Darren Woods said the Western Hemisphere’s largest energy company is maintaining its capital spending program and still plans to start up several projects this year, including off the shores of booming Guyana.
“We’re ready for this,” Woods said on the earnings call, noting that Exxon is “pretty well shielded” from tariffs for projects that are already under construction.
“We know that shorter-term investors want lower capex and higher cash distributions. I suspect with today’s level of market uncertainty, the call for this will be even stronger. That’s shortsighted. We play the long game,” Woods argued. “We are rewarding investors today with investments made in the past when we faced similar circumstances and a lot of criticism for staying the course. The passage of time demonstrated the value in this approach.”
One particularly timely project Exxon Mobil just brought online this spring is its $10 billion China chemical complex. “We will competitively supply high-value chemical products for the China market, protected from tariffs with attractive long-term growth.”
However, Woods did make it clear that about one-third of Exxon’s oil and gas production is short-cycle, especially in the onshore U.S., where it can ramp down more quickly if needed later this year. Additional projects that are not yet green-lit could always be delayed if needed, he said.
Last year Exxon dramatically increased its exposure to the onshore U.S., in particular the massive Permian Basin, with the $60 billion acquisition of Pioneer Natural Resources.
“I don’t think we have finished mining the value that we see in this combination,” Woods said. “It’s full steam ahead. Everything is looking very good, and we’re exceeding our own expectations.”
The two biggest oil and gas production drivers for Exxon are the Permian and offshore Guyana, which was pioneered by Exxon in recent years.
International feuds
They reported earnings on the same day as usual, but Exxon also is going to arbitration May 26 in a high-stakes feud that could decide the fate of Chevron’s pending $53 billion acquisition of Hess.
The crown jewel of the Hess portfolio is its 30% stake in Exxon’s Stabroek block off the shores of Guyana. Exxon took Hess to arbitration arguing it should have first right of refusal to purchase Hess’s Guyana stake.
The dispute is expected to determine whether the much-delayed Chevron-Hess deal could close in the third quarter or whether it falls apart completely.
Touting its confidence, Chevron recently bought 5% of Hess’s shares, and Chevron chairman and CEO Mike Wirth said May 2 he expects the deal to close in the “coming months.”
And like Woods, Wirth said he’s undeterred by the tariff and oil price situations. Chevron has a $10 billion to $20 billion share buyback range each year, and while 2025 looks to be on the lower end of the range, Chevron is keeping its guidance.
“Chevron has a proven track record of managing through uncertainty and commodity cycles, and with long-standing financial priorities as our guide, we’re well positioned to win in any environment,” Wirth said.
Chevron is even looking to acquire in petrochemicals. Wirth said Chevron is interested in acquiring Phillips 66’s 50% stake in their Chevron Phillips Chemical joint venture and has already reached out about a potential deal.
“We’d be interested in acquiring the other half at a reasonable value for both parties, and we’ll see how that plays out,” Wirth said.
That conversation is particularly timely because Phillips 66 is dealing with a heated proxy fight with activist shareholder Elliott Investment Management, which is in part pushing for the sale of the joint venture. Phillips 66 has thus far resisted the notion.
Outside the U.S., Chevron has invested most heavily of late in Kazakhstan’s massive Tengiz oilfield, bringing a $48 billion expansion online in January.
Wirth visited Kazakhstan in April and met with Kazakh President Kassym-Jomart Tokayev. Wirth said he is optimistic Chevron can continue the relationship for decades to come.
However, as part of the OPEC+ group of OPEC allies, Kazakhstan is now feuding with OPEC for exceeding its oil production quotas, including new Chevron production.
Wirth said the OPEC issues were not discussed during his visit, nor were there any discussions of temporarily curtailing Tengiz production.
Showcasing the tangled web of the global industry, Exxon also owns a 25% stake in Chevron’s Tengizchevroil joint venture.
Just the numbers
Chevron’s adjusted earnings year over year fell 30% from $5.4 billion to $3.8 billion, although earnings rose slightly sequentially from $3.6 billion in the fourth quarter. Chevron’s stock was up about 1.6% in afternoon trading.
Exxon’s earnings dipped 6% year over year from $8.2 billion to $7.7 billion, while also up sequentially from $7.6 billion. Exxon’s stock was holding almost even, but up 0.6% in the afternoon.
Shell saw the biggest stock jump of the group at 3%. Shell CEO Wael Sawan said the company is emphasizing buybacks over any big, imminent dealmaking, especially as rumor mills have wondered whether Shell could seek to acquire BP in a mega merger.
Shell’s adjusted earnings fell almost 28% year over year from $7.7 billion to $5.6 billion, while up sequentially from $3.7 billion in the fourth quarter.
