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Exxon tries to put the worst behind it with US$20b impairment charge
[BENGALURU] Top US oil producer Exxon Mobil Corp on Monday said it would write down the value of US$17 billion to US$20 billion in natural gas properties, its biggest ever impairment, and slash spending next year to its lowest level in 15 years.
The oil major is reeling from the Covid-19 pandemic's impact on energy demand and prices, and is trying to protect a rich shareholder payout that is yielding 8.6 per cent and costs nearly US$15 billion a year.
Coming impairments include much of the value of Exxon's 2010 purchase of shale producer XTO Energy, a stock deal worth roughly US$30 billion at the time.
The XTO purchase thrust Exxon into the forefront of the US shale boom, but was largely a bet on natural gas just before prices went on a decade-long slide.
Exxon will focus instead on Guyana, where it discovered up to 8 billion barrels of oil, offshore Brazil, and the Permian Basin oil field, the company said.