ExxonMobil and Chevron reaffirmed multibillion-dollar capital spending plans for 2020 despite challenging oil and gas prices and a short-term surplus of capacity among refineries and liquefied natural gas  plants. The two largest US energy groups revealed weaker performances in the fourth quarter of 2019, with Exxon reporting its first loss in chemicals since before its 1999 merger with Mobil. Both companies are under pressure to deliver shareholder returns while investing to increase production.

Darren Woods, Exxon chief executive, stood by the company’s prior plans for $33bn-$35bn in capital spending this year, up from $31.1bn in 2019, but held out the possibility of changing the pace of some projects as conditions warrant. “We know demand will continue to grow, driven by a rising population, economic growth and higher standards of living. You know that excess capacity will shrink typically faster than people think. And margins will rise, then new capacity will be needed,” he said.

Exxon reported net income of $5.7bn in the fourth quarter, or $1.33 per share, down from $6bn, or $1.41 per share, a year earlier. Its results were buoyed by one-off items worth about $3.9bn, or $0.92 per share, largely from gains involving the $4.5bn sale of Exxon properties in Norway to Var Energi late last year. Without those items, net profit was about $1.8bn, or $0-41 per share, which were below analysts’ expectations of $0-45.

Both companies have been stung by natural gas prices that have tumbled to the lowest in years as a warm winter covers much of the northern hemisphere. Mike Wirth, Chevron chief executive, said he expected little change for the rest of the year. “We’re not banking on a recovery in gas prices,” he said.

Prolonged weakness in gas prompted Chevron to write down $10-4bn in assets , which included $6.5bn in Appalachian shale gas wells and $1.6bn for the proposed Kitimat LNG project on the west coast of Canada. The charges led to a loss of $6.6bn, or $3.51 per share, at Chevron, slightly ahead of analysts’ estimates, but a reversal from profits of $3. 7bn a year previously. Mr Wirth said Chevron planned $2obn in capital spending this year, matching levels of the past two years.