Geopolitics loom large over Big Oil earnings as investors seek Venezuela details
Exxon Mobil executives and Chevron executives will likely face more questions about their investment opportunities in Venezuela when they speak with analysts this Friday. After President Trump announced that he wanted to invest $100 billion to increase and control Venezuelan production, the U.S. captured and removed Venezuelan President Nicolas Maduro. The dramatic shift in geopolitics that occurred after renewed U.S. - China trade tensions, and Russia - Ukraine peace talks in the fourth quarter 2025 led to fluctuating oil price. Investors also have been focused on the widespread anti-government demonstrations in Iran, and a potential U.S. reaction in recent days.
Exxon, Chevron and TotalEnergies will release their fourth-quarter earnings and annual results on Friday. BP, Shell and TotalEnergies, the three major European oil companies, will be reporting next month.
MAJORS TO FACE VENEZUELA QUESTIONS
Chevron is in the spotlight in Venezuela, as it's the only American oil company currently operating there. However, the topic will come up with all oil companies, according to Stephanie Link, Chief Investment Strategist at Hightower Advisors. The firm is a major shareholder of both Chevron, and Exxon.
Jason Gabelman is the managing director of energy equity at TD Cowen. He estimates that Venezuelan oil accounts for 1%-?2% of Chevron’s cash flow. The company could increase production by another 1%-2% over the next few year.
Jean Ann Salisbury of Bank of America Global Research wrote that there are still too many questions to answer in order to determine the value of Venezuela for Chevron.
She wrote: "We still see Chevron in the leading position with its existing personnel, relationships and payment mechanisms, but we'd need more visibility before we could assign value."
Analysts say it's unlikely that companies will reveal much detail about potential Venezuela plans given the long-term timeline for oil projects.
Gabelman says that Shell and BP should pay more attention to Venezuela in the future, as their asset portfolios over long periods of time are less strong than those of U.S. companies.
EXXON IS LIKELY TO ASK QUESTIONS ABOUT GUYANA
Salisbury, of BofA, wrote in an independent note Monday that a major concern for Exxon is whether it will be able access new parts in the Stabroek Block, in neighboring Guyana. 30% of this prolific oilfield remain unexplored because of territorial disputes between Guyana & Venezuela.
Exxon holds 45% of the Stabroek oil consortium, while Chevron has 30%. Exxon CEO Darren Woods called Venezuela "uninvestable", during a White House Summit earlier this month. He said the company needed protections for investment after its assets were expropriated two times. Tengiz, Kazakhstan's largest oilfield, suffered a shutdown of production this month, the latest setback following the attack by Ukrainian naval drones on the field's major export route. Chevron is the leader of Tengiz's joint venture, while Exxon has a stake.
WEATHERING OIL PRICES CAN SQUEEZE EARNINGS
Exxon had previously indicated that lower crude oil prices could reduce its fourth-quarter?earnings upstream by as much as $1.2 billion in comparison to the previous three month period. Wall Street is expecting the biggest U.S. producer of oil to report adjusted earnings per share of $1.68, an increase by one cent over the previous quarter.
Analysts expect Chevron will report adjusted earnings of $1.46 per share. This is a 29% drop from last year.
According to a poll conducted by BP, analysts expect BP's underlying net profit to be around $1.55 billion. This is 30% lower than the last quarter's results and a third higher than last year's 4th quarter.
Shell's adjusted net profit is expected to be $3.5 billion, according to a survey of analysts conducted by the company. This figure is around 35% lower than last quarter's and 4% less than last year's.
Weaker oil trading performance dragged
In their earnings guidance, released earlier this month, each company said the following.
Brent crude prices were $63,08 per barrel in the quarter from October to December, down 7.5% on the previous three-month period, due to fears that the oil market was oversupplied.
The fourth quarter saw a 32% increase in U.S. Natural Gas prices, averaging $4.04 for every million British Thermal Units. This was due to colder weather conditions and increased demand for liquefied gas.
Link, of Hightower Advisors, stated that investors would continue to be attentive to any changes in the outlook of companies for the remainder of the year as well as shareholder returns.
She said: "I do not expect any changes in dividend or buyback programs for 2026. But their guidance on these topics will be very important." Sheila Dang reported from Houston, with additional reporting by Stephanie Kelly and editing by Nia Williams.
(source: Reuters)
