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    ExxonMobil to maintain capex, expand low carbon spending

Summary

Low-carbon spending will be increased by $17bn over the next five years. [Image credit: ExxonMobil]

by: Dale Lunan

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ExxonMobil to maintain capex, expand low carbon spending

US major ExxonMobil said December 8 it would maintain corporate spending through 2027 in the $20-$25bn range while raising investments in low-carbon business solutions by about $17bn over the same period, an increase of about 15%.

The new five-year plan is expected to double earnings and cash flow potential by 2027 from 2019 levels, CEO Darren Woods said, supporting the company’s plan during the pandemic to increase its oil and gas investments, even as its peers were moving towards renewables.

“Our five-year plan is expected to drive leading business outcomes and is a continuation of the path that has delivered industry-leading results in 2022,” Woods said. “We view our success as an ‘and’ equation, one in which we can produce the energy and products society needs and be a leader in reducing greenhouse gas emissions from our own operations and also those from other companies.” 

Investments in 2023 are budgeted in the $23-$25bn range, a modest increase from the 2022 capital program of $21-$24bn, and the company remains on-track to deliver structural cost reductions of about $9bn by the end of 2023, as compared to 2019.

More than 70% of ExxonMobil’s spending in the five-year plan will be directed to strategic developments in the US Permian Basin, in Guyana and Brazil and in LNG projects around the world. By 2027, upstream investments are targeted to increase production by about 500,000 barrels of oil equivalent (boe)/day, to 4.2mn boe/day. Production in 2023 is expected to remain at about 3.7mn boe/day.

About 40% of ExxonMobil’s low-carbon investments of $17bn through 2027 will be directed toward building its lower-emissions business with customers to reduce their greenhouse gas emissions. Primary emphasis will be on carbon capture and storage, biofuels and hydrogen, it said.

The balance of the capital will be deployed to to support ExxonMobil’s 2030 emission-reduction plans and its ambition to reach net-zero in Scope 1 and 2 emissions by 2050.

“We’re aggressively working to reduce greenhouse gas emissions from our operations, and our 2030 emission-reduction plans are on track to achieve a 40-50% reduction in upstream greenhouse gas intensity, compared to 2016 levels,” Woods said. “We will continue to advocate for clear and consistent government policies that accelerate progress to a lower-emissions future. At the same time, we’ll continue to work to provide solutions that can help customers in other industries reduce their greenhouse gas emissions, especially in higher-emitting sectors of the economy like manufacturing, transportation and power generation.”