OREANDA-NEWS. ExxonMobil will cut its spending by 25pc in 2016 as US upstream losses outweighed downstream success.

The major set 2016 capex at $23.2bn versus $31.1bn for 2015, which was 19pc lower than a year earlier. Annual profits fell by 50pc to $16.2bn in 2015 from $32.5bna year earlier, and upstream income fell to $7.1bn from $27.6bn a year earlier. US upstream earnings fell to a loss of $1.1bn from a profit of $5.2bn a year earlier. Non-US upstream earnings fell to $8.18bn from $22.4bn a year earlier.

"While our financial results reflect the challenging environment, we remain focused on the business fundamentals, including project execution and effective cost management," chief executive Rex Tillerson said in a statement.

Overall, the company completed six major upstream projects during the year in Canada, Indonesia, Norway, the US and West Africa to achieve its 4.1mn b/d of oil equivalent (boe/d) target, up 3.2pc from a year earlier. Of that, liquids output rose to 2.35mn b/d from 2.11mn b/d a year earlier.

Fourth quarter profit fell by 58pc to $2.8bn during the quarter from $6.6bn a year earlier, while output rose by 4.8pc, with liquids increasing by 299,000 b/d during the quarter to 2.5mn b/d.

For the full year, it generated cash flow of $32.7bn from operations, which includes $2.4bn from asset sales. Downstream earnings rose by $3.5bn during the year to $6.6bn.

Total upstream earnings fell to $857mn during the quarter from $4.6bn a year earlier, but US upstream earnings posted a loss of $538mn from a profit of $1.5bn a year earlier. Non-US upstream earnings fell to $1.4bn from $3.9bn a year earlier. Total downstream earnings rose by $854mn to $1.4bn, while US downstream earnings rose by $436mn from a year earlier to $435mn.

Of the major projects started during the fourth include the onshore processing facility at the Banyu Urip field in Indonesia, which helped output reach more than 130,000 gross b/d in the fourth quarter. "The field is currently ramping up to full capacity and is expected to produce 450mn gross bl of oil over its lifetime," it said.

The major generated $5.1bn in operating cash flow during the quarter, which included $785mn from asset sales. Capex for the quarter fell to $7.4bn from $10.5bn a year earlier.

It earned an average of $34.36/bl in the fourth quarter for crude produced in the US versus $63.3/bl a year earlier, $36.99/bl for crude produced outside of the US compared with $69.49/bl a year earlier.