The New Zealand division of ExxonMobil, the world's largest publicly traded oil and gas company, turned from a loss to a $91 million profit in 2016, bolstered by the impact of increasing oil prices on inventories in the year.
The local company's net profit for calendar 2016 was a turnaround from 2015's $2.7m loss and 2014's $33.5m loss. Last year, revenue dipped to $2.2 billion from $2.4b in 2015, financial statements lodged with the Companies Office show.
ExxonMobil NZ's spending on raw materials and consumables dropped 6 per cent to $1.3b, while it paid $607m in sales tax and duties, a 3 per cent lift on the year earlier, meaning its costs represented about 87 per cent of its revenue. However, a $107.3m increase in inventory value, which it said came from "factors such as higher inventory levels on hand and higher oil prices at year end", turned it to a profit. In 2015, ExxonMobil downgraded its inventory valuation by $43.9m.
Global oil prices collapsed in late 2014, driven by a glut, falling from between US$90 (NZ$127) and US$100 per barrel for Brent crude, an international benchmark, to below US$50. Weakness continued in 2015 and 2016, with prices as low as US$30 per barrel, but recovered somewhat over the course of 2016, rising above US$50 again. Price volatility persists, with output cuts by the Organisation of the Petroleum Exporting Countries (OPEC) and other oil producers failing to drain oversupply.
The company has 170 Mobil branded sites in New Zealand and supplies fuel to over 150 unbranded sites. It spent $27m on infrastructure in 2016, and said it has "several assets under construction."
