Global oil's chemical business falls

It is understood that the information recently released by the oil giants in 2011 revealed such information. Affected by the weak market, the profitability of the chemical businesses of major global oil giants declined in the fourth quarter of last year.

ExxonMobil Chemical Company achieved a net profit of US$543 million in the quarter, a drop of 49% year-on-year, mainly due to the dual impact of weak earnings and declining sales. ExxonMobil Chemical said that the profit decline in the fourth quarter of last year resulted in a decrease of US$230 million in profits, and a decrease in sales volume resulted in a decrease of US$40 million in profits. Other factors were mainly due to adverse tax policy impacts that led to a decrease of US$250 million in profits. In the quarter, the company’s product sales reached 6.27 million tons, a decrease of approximately 78,000 tons year-on-year.

Shell Chemicals' profits decreased by 23% year-on-year to US$380 million. Chemicals sales fell by 16% year-on-year, from 4.4 million tons in the same period last year to 4.4 million tons. According to Shell Chemicals, the main reason for the company’s fourth-quarter sales and sales revenue was the frequent failure of production equipment and weak global market demand. In the quarter, the operating rate of the company’s production facilities was only 86%, compared with 94% in the same period of last year.

BP’s petrochemical business’s fourth-quarter profit fell by 60% year-on-year, from US$ 243 million in the same period last year to US$ 96 million. The company did not disclose the sales revenue of the petrochemical business, but said that the output of petrochemical products fell 4% year-on-year, from 3.72 million tons to 3.58 million tons. Increased production capacity of Asian petrochemicals and weak market demand are the main reasons for the decline in the fourth quarter.

Chevron’s downstream operations in the United States in the fourth quarter included Chevron Phillips Chemical Corp’s $204 million loss, compared to a net profit of $475 million in the same period last year. The main reason is that the company sold the equity of Colonial Pipeline in the fourth quarter of 2010. In addition, the poor profitability of sales of refined products is also one of the main reasons for the downstream business losses.