To increase oil and gas production by 18%, Exxon Mobil announced that it will increase its yearly project spending to between USD 28 billion and USD 33 billion between 2026 and 2030.
With a five-year plan, the leading American oil producer aims to boost output and earnings by USD 20 billion by 2030, surpassing this year’s projected USD 34.2 billion.
The new targets coincide with Exxon’s recent success. It is making enormous profits from its operations in Guyana and the United States. The shale company’s acquisition of Pioneer Natural Resources has put it on track to double oil production from 2025 onwards.
The increased project spending is anticipated “to generate returns of more than 30% over the life of the investments,” according to CEO Darren Woods.
In a media briefing, he stated that Exxon has a distinct competitive advantage due to its emphasis on extracting gas and oil from low-cost fields.
Darren Woods added that “the advantages we’re growing in my mind opens the door for M&A (mergers and acquisitions),” indicating that mergers are still a way to accelerate businesses.
Analysts were caught off guard by the increased expenditure. Before Pioneer-related expenses, its capital expenditures ranged from USD 22 billion to USD 27 billion annually through 2027.
“Production plans and the outlook for earnings look broadly in line with expectations. The market may remain sceptical around the earnings potential until we see further evidence of delivery,” wrote RBC Capital Markets analyst Biraj Borkhataria.
According to CFO Kathryn Mikells, the company’s cost-reduction goal was raised from USD 15 billion by 2027 to USD 18 billion by 2030. With USD 27 billion in cash and equivalents, Exxon’s robust balance sheet “provides a buffer against price volatility,” according to Mikells.
In the Permian, the top US oil basin, Exxon wants to more than triple its output shale field, to reach 2–3 million barrels per day by 2030, and to extract 1–3 million barrels per day from its profitable operations in Guyana.
Meet Darren Woods, The Energy Industry Veteran
Darren Woods obtained a Bachelor of Science degree in electrical engineering from Texas A&M University. Additionally, he graduated from Northwestern’s Kellogg School of Management in Evanston, Illinois, with a Master of Business Administration.
In 1992, Darren Woods began working for Exxon Company International in Florham Park, New Jersey, as a planning analyst. He worked for Exxon Company International, ExxonMobil Chemical Company, and ExxonMobil Refining and Supply Company, advancing through several domestic and foreign assignments.
Darren Woods oversaw international speciality-chemical operations at ExxonMobil Chemical Company in Houston, Texas, after being named vice president there in 2005.
In 2008, he was appointed director of refining for Europe, Africa, and the Middle East at ExxonMobil Refining and Supply Company, with headquarters in Brussels. He was named vice president of supply and transportation in 2010, with his headquarters located in Fairfax, Virginia.
In 2012, Woods was named vice president of Exxon Mobil Corporation and president of ExxonMobil Refining and Supply Company. Exxon Mobil Corporation elected Darren Woods as its senior vice president in 2014. He was elected president and a member of the board of directors of Exxon Mobil Corporation in January 2016. In 2017, Woods was appointed as the Chairman and CEO by the ExxonMobil Board of Directors.
Darren Woods is a member of the American Petroleum Institute’s executive committee and serves as its chairman at the moment. The Texas A&M University Engineering Advisory Council, the Business Roundtable, the Business Council, and the National Petroleum Council are among his other memberships.
Exxon Aims Big
As per Mikells, overall oil and gas output should hit 5.4 million bpd, up about 18% from 4.58 million bpd currently. Its long-range target is more aggressive than shown by the American rival Chevron, which plans to reduce 2025’s project spending and slow shale production growth.
President-elect Donald Trump’s pledge to encourage US oil production and “get out of the way of the industry” bodes well for Exxon and energy producers, CEO Darren Woods said. However, as per the energy industry veteran, plans can be revised based on market conditions.
Exxon announced two new projects for Guyana by 2030, in line with a previous statement of seven to 10 in total. Its liquefied natural gas production target remains unchanged at 40 million metric tons per annum.
In its US shale operations, Exxon expects to achieve USD 3 billion in cost savings from combining with Pioneer’s shale operations. Drilling engineers at Exxon headquarters remotely control the combined 35 drilling rigs operating in the Permian basin, said Vice Chairman Neil Chapman.
“Improved economies of scale in drilling, water disposal and longer wells also have reduced the number of wells drilled while increasing the amount of oil recovered from each by 20%. Exxon also is using a new fracking material supplied by its refineries to drain oil and gas from shale wells,” Chapman said.
The new targets aim to assure shareholders that returns can be sustained through oil market price swings. However, as per a Reuters report, Exxon’s 12.7% year-to-date share gain is well above the sector’s 8.4% appreciation as measured by energy mutual fund XLE. Its share-price increase contrasts with double-digit percentage declines in shares in ConocoPhillips and Occidental Petroleum in 2024.
“The company is also investing in carbon capture and sequestration operations around the world. It has contracts for collecting 7 million tons of carbon annually, earning “very solid returns” from the business,” Darren Woods said.
Earnings from its low-carbon solutions business can increase by USD 2 billion by 2030 compared to the 2024 numbers. Exxon, however, has not broken out the unit this year’s profit figures yet.
“Exxon will hold off on approving a massive hydrogen project in Texas pending revisions to US incentives for such projects,” Darren Woods reiterated.
The outgoing Joe Biden administration set regulations to restrict incentives for hydrogen made from natural gas, a position Exxon opposes.
While cash was not invested in the lower carbon businesses, it can be invested elsewhere, Woods said. Exxon is considering providing lower carbon energy for data centre operators seeking to boost access to electric power.
Exxon also made a crucial leadership change in December 2024, as it appointed Dan Ammann, former president of General Motors, to take over the energy producer’s largest and most profitable business. Ammann, who joined Exxon two years ago to run its clean energy unit, called Low Carbon Solutions, will replace 34-year Exxon veteran Liam Mallon as president of Exxon’s oil and gas pumping business, from February 2025.
As head of Exxon’s Upstream business unit, Ammann will oversee a business that has contributed more than two-thirds of Exxon’s operating profit in 2024. The Low Carbon unit was designed to make a business by helping Exxon and industrial customers reduce carbon emissions from operations.
Under Ammann, Exxon has spent big on potential carbon dioxide sequestration sites, acquiring carbon dioxide pipeline firm Denbury for USD 4.9 billion, and creating lithium and hydrogen development partnerships. Abu Dhabi state oil firm ADNOC recently struck a preliminary deal to acquire a 35% stake in a proposed Exxon hydrogen project if it reached a financial go-ahead.
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