Exxon (XOM) broke the news Monday ahead of its April 29 official quarterly earnings report, saying high oil prices weighed heavily on earnings during the quarter. But it could also take a $4 billion loss on a drilling project in Russia partly owned by the Russian government that is set to shut down this month due to Russia’s invasion of Ukraine and related Western sanctions — and is developing steps to exit the company.
“Depending on the terms of the exit,” the company said, it could be forced to write down its investment in the project up to the full $4 billion value.
But Exxon’s core business is booming. The rise in oil prices alone will add up to $2.3 billion to Exxon’s earnings compared to the fourth quarter, according to the company’s filing Monday. US oil prices rose by a third during this period.
Higher natural gas prices could add another $400 million, Exxon said.
The earnings boom disclosure comes as oil and gas companies face scrutiny, including from the White House, for not doing enough to reinvest their profits in new supplies that could ease high prices at the pump for consumers. Exxon and Chevron (CVX) CEOs, along with executives from other major oil companies, are scheduled to testify Wednesday before Congress at a hearing titled “Pouted at the Gas Station: Big Oil and America’s Pain at the Pump.”