Exxon makes record first-quarter profit of $10.9bn

Exxon Mobil outdid its European rivals yesterday with record first-quarter profits despite falling production and growing problems in Nigeria.

The world's largest company earned $10.9bn in profits in the first three months of the year, 17 per cent up over the same time period last year, thanks to an oil price that has reached new highs just shy of $120 per barrel. The results were the best ever for the American oil giant at this point in the year and the second best quarterly result for an American company, beaten only by the $11.7bn that Exxon earned in a quarter last year. The numbers were also significantly better than the record results published by BP and Royal Dutch Shell – they pocketed combined profits of $14.2bn – earlier in the week.

However, in an indication of the frothy environment for the industry, Exxon shares fell by more than 4 per cent because the performance fell short of Wall Street forecasts.

Like rivals across the sector the company reported a sharp drop in oil production from the same period last year. The company pumped about 4.1m barrels of oil equivalent daily, down about 5 per cent from the 4.4m it was producing last year. This was exacerbated by asset seizures by Hugo Chavez's government in Venezuela.

Production numbers could be even worse in the future if the situation in Nigeria deteriorates further. The company said this week that 800,000 barrels per day were "shut-in" due to a strike for higher wages. Yesterday was the eighth day of the strike.

Margins in its refining and marketing business, through which it sells products such as gasoline, also shrank markedly due to its limited ability to pass on the massive increase in the oil price to customers.

Exxon announced the renewal of a production sharing contract with Malaysia's state-owned oil group Petronas. Amid the rise of resource nationalism around the world, analysts assumed that the new contract would grant a far greater slice of profits from the 43 platforms it operates in the country. Exxon declined to comment.

The Rockefeller family, the company's longest continuous shareholders, is likely to have been as unimpressed by the numbers as Wall Street. Having maintained a stony silence for years on how the company is run, the family attacked the company this week, arguing that an independent chairman should be appointed to help to steer the company in a world where climate change and renewable energy are of greater importance. Rex Tillerson is chief executive and chairman.