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DRILL DOWN

Big Oil’s supremely awful quarter, in one chart

Jason Karaian
By Jason Karaian

Global finance and economics editor

The supermajors aren’t feeling so super these days. This week, the six largest private oil companies reported third-quarter earnings, and the news wasn’t pretty.

The wrenching drop in oil prices since mid-2014 has made things uncomfortable for oil companies for some time, but the latest quarter has a distinct feel of capitulation to it. With production and stockpiles as strong as ever, there are few signs that prices will rise any time soon.

As a result, companies are slashing investments and shelving projects. Across the industry, oil companies have written down the value of once-promising projects by some $20 billion this week alone, according to Bloomberg.

Royal Dutch Shell led the way with a $7.4-billion quarterly loss—its worst result in 16 years—thanks to a huge write-off related to its ill-fated effort to drill in the Arctic. ConocoPhillips recorded a $1.1-billion loss for the quarter, and said it would quit all deepwater exploration by 2017. BP barely eked out a profit thanks to aggressive cost cuts.

The other three supermajors fared better, but only in relation to their peers. ExxonMobil’s $4.2-billion profit was half of what it made last year, while Chevron and Total saw quarterly profits fall by two-thirds. Chevron said it will cut up to 7,000 jobs and slash capital spending by 25% next year, while Total pledged to shed $10 billion in underperforming assets by 2017.

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