New York (AFP)

ExxonMobil and Chevron on Friday unveiled the extent of the first damage caused by the collapse of oil prices and the coronavirus pandemic, which is crippling the world economy, and warned that the worst was to come.

ExxonMobil recorded a net loss of $ 610 million in the first quarter due to a $ 2.9 billion charge related to asset impairments as a result of black gold prices falling to historic lows .

It is the first time that the Texan giant has lost money since 1988. It had posted a net profit of $ 2.35 billion in the first quarter of 2019.

"The Covid-19 frankly significantly affected short-term (crude) demand, which translated into oversupplied markets and put unprecedented pressure on commodity prices and margins," said CEO Darren Woods.

If Chevron posted quarterly net income of $ 3.6 billion, it was mainly due to a combination of windfall gains - a gain on disposal of 240 million, a tax credit of 440 million and effects favorable exchange rates estimated at 514 million.

Sales fell 10.5% and CEO Michael Wirth was alarmist: "Financial results in the coming quarters should be affected if current market conditions persist," warned the manager.

The results and the warnings of the two American giants echo the publications of their European rivals Royal Dutch Shell and BP.

The worst is indeed to come for the oil industry because the first quarter was almost over when the oil price war started between Saudi Arabia and Russia.

It was 85% complete when containment and social distancing were announced in the United States to stem the spread of Covid-19, a disease caused by the new coronavirus.

- Protect dividends -

These measures have caused world demand for oil to fall by a third, lowered the value of oil assets, eliminated drilling projects, destroyed thousands of jobs and forced energy groups to file for bankruptcy.

In addition to a request to stop, the oil market is also faced with storage capacities having reached their limit, which pushed the price of the American barrel to go in April in negative.

To cope, the majors rely on savings and debt, while the bosses have to arbitrate between pampering the shareholders or strengthening the reserves.

ExxonMobil will reduce its production of hydrocarbons by 400,000 barrels per day and its budget dedicated to investments, in particular to the exploration of deposits and the drilling of oil wells, by $ 10 billion.

Chevron plans to cut its oil and gas production by 300,000 barrels a day in May, and 400,000 from June, and abandon 60% of the oil wells it leases.

After decreasing its investments in March by 20% to 16 billion dollars, the oil group will further decrease them by another 2 billion.

"We are taking these measures to protect the dividend," said boss Michael Wirth, wishing to reassure shareholders on the alert after the suspension of share buyback programs.

After 0.87 dollars per share for the first three months of the year, ExxonMobil will distribute a dividend of an equivalent amount for the second quarter.

The major, however, was careful not to increase this dividend, a first since 2007, even when its rival Shell reduced its dividend for the first time since the Second World War.

"Economic activity will grow again; people's living standards will increase, which in turn will drive demand for (petroleum) products and the recovery of the energy industry," said Darren optimistically. Woods, the big boss.

© 2020 AFP