Oil giant Exxon Mobil suffered its first annual loss in decades last year as the pandemic prompted energy use to plunge.
The firm lost $22.4bn (£16.4bn) as energy prices dropped – at one point falling below zero.
The downturn forced the company to make drastic cuts to its workforce and investment plans.
Under pressure from activists, Exxon has also said it will expand its focus to more climate-friendly technology.
It said it was starting a new business focused on reducing pollution by using carbon emissions capture, a strategy the firm already makes wide use of in its own operations.
The firm also said it planned to invest $3bn in “lower emissions solutions” over the next four years.
“Last year clearly was an unprecedented event – something that forced dramatic action in the industry and within our company,” Exxon chief executive Darren Woods said. “We changed a lot of things.”
Exxon, which ranked as America’s most valuable public company as recently as 2013, reported a full-year profit of more than $14bn in 2019.
But last year’s collapse in energy demand and prices caused by the Covid-19 crisis saw the firm’s revenue drop by more than 30% to $181.5bn.
The firm wrote down the value of its shale business by roughly $20bn, took on billions of dollars in debt and slashed spending by roughly $8bn. By 2023, it said additional cuts, including to staff, would reduce costs by an estimated $6bn a year.
‘Poor long-term planning’
Exxon’s financial strains are not unique. Rivals BP and Chevron also posted annual losses.
But Exxon, which has seen its share price slide in recent years, is seen as lagging behind other oil and gas firms in adapting to the pressures caused by climate change.
It is the target of environmentalists and activist investors, who have called for an overhaul of its management and changes to strategy.
Engine No 1, the activist firm leading the current campaign, said Exxon remained stuck with plans that “position it to succeed only in the absence of a material long-term energy demand shift” and dismissed its focus on carbon capture as “poor long-term planning”.
“Today’s patchwork of announcements do not materially alter ExxonMobil’s long-term trajectory nor do they position it to succeed in a changing world,” the firm said.
Exxon leaders defended their plans to analysts on Tuesday, saying they have considered a range of investment strategies depending on whether oil prices – now hovering above $50 a barrel – drop back.
They also said they saw Exxon’s experience with carbon capture and storage – which reduces greenhouse gases by taking carbon emissions and depositing them underground – as a business opportunity, as governments around the world redouble efforts to fight global warming.
“We recognise that carbon capture storage is critical to achieving the ambitions of the Paris Climate Agreement and we’re beginning to see broader recognition of the importance of that,” Mr Woods said.
“We felt like… now is the time to bring a more concerted effort in this space.”