DALLAS (AP) — Oil giants Exxon and BP reported staggering losses for 2020 yesterday as the pandemic crushed energy demand and undercut oil prices.

ExxonMobil Corp reported the largest losses in its history — nearly US$20.1 billion for the fourth quarter, including more than US$19 billion to write down the value of company assets. For the full year, it lost US$22.4 billion.

BP PLC posted a profit of US$825 million in the fourth quarter, but still lost $18.1 billion in 2020. The results came after Chevron reported last week that it lost $5.5 billion last year.

Signs point to better results for the oil giants this year. Crude prices are up roughly 50 per cent in the past three months, including a gain of more than 10 per cent since January 1, as major producers led by Saudi Arabia have cut output.

The oil companies are hoping that the roll-out of COVID-19 vaccines will mean a return to more normal life for businesses and consumers, which would in turn boost demand for oil and natural gas.

Energy demand slumped last year as the pandemic led to lockdowns and a dramatic drop in energy for uses such as transportation.

“Energy consumption collapsed as economies shut down, oil prices hit their lowest point in history, and refining margins fell well below their 10-year lows,” said Exxon CEO Darren Woods. “It was the first time in memory that we saw simultaneous lows in each of our businesses.”

Irving, Texas-based Exxon, is responding by cutting costs. It expects by 2023 to cut US$6 billion in annual spending, compared with 2019 levels.

Exxon’s big fourth-quarter loss contrasted with a profit of $5.7 billion a year earlier. Excluding the massive write-downs and other impairment costs, the company said it earned 3 cents per share. Analysts, on average, expected a penny-per-share profit, according to a survey by Zacks Investment Research.

Revenue dropped 31 per cent to US$46.5 billion.

Exxon has long been under pressure from activist shareholders to focus more on renewable fuels and pivot away from its fossil-fuel legacy. One of those shareholders, investment firm Engine 1, nominated four candidates for Exxon’s board of directors, which will be chosen in May, and jumped on the company’s poor financial results.

Engine 1 said Exxon is “positioned for continued value destruction for decades” by assuming that oil and gas production will continue to grow even in the face of efforts to reduce climate change blamed on burning fossil fuels.

London-based BP last year announced it will seek to become a net-zero producer of carbon emissions by 2050. However, the company is still bringing new oil and gas projects into operation.

BP is also cutting costs.

“We began reinventing BP, with nearly 10,000 people leaving the company,” CEO Bernard Looney said in a statement. “We strengthened our finances — taking out costs and closing major divestments.”