New York attorney general launches investigation into Exxon Mobil’s accounting practices
New York attorney general Eric Schneiderman is reportedly probing why Exxon Mobil has not written down the value of its assets, despite the prolonged oil price slump which has riled the industry.
The Wall Street Journal reported that Schneiderman's office has launched an investigation into the firm's accounting practices. It's already looking into whether Exxon misled investors over the potential impact of climate change.
The black stuff has plummeted over the last two years due to a stubborn supply glut. This has rendered some projects uneconomic, forcing oil companies to write down the value of these assets on their balance sheets.
However, Exxon is the only oil major which hasn't booked a paper loss amid the commodity rout. It recently said that its profit for producing oil and gas had fallen by about 85 per cent to $294m.
And while the situation in the oil market has improved since crude tumbled below $27 per barrel at the start of this year, the International Energy Agency (IEA) recently warned it will remain oversupplied until mid-2017.
Exxon has previously said it does not need to make write-downs because it takes a very conservative approach to estimating the value of new potential fields and wells.
"We don't do write-downs … we are not going to bail you out by writing it down. That is the message to our organisation," Exxon's chief executive, Rex Tillerson, told trade publication Energy Intelligence last year.
Exxon's shares slumped around 1.5 per cent to $83.80 in premarket trading today.