ExxonMobil to Grow Long-Term Shareholder Value in Lower Carbon Future
ExxonMobil today outlined its plans through 2025 to increase earnings and cash flow to sustain and grow its dividend, reduce debt and fund advantaged projects, while working to commercialize lower emission technologies in support of the goals of the Paris Agreement.
ExxonMobil plans capital spending of $16-$19 billion in 2021 and $20-$25 billion per year through 2025 on high-return, cash-accretive projects. Spending plans can be modified to reflect market conditions, as illustrated by successful efforts to preserve the value of investment opportunities while reducing capital spending by more than 30 percent in 2020 as a result of the pandemic. The company also reduced cash operating expenses by 15 percent in 2020 and expects permanent structural savings of $6 billion a year by the end of 2023 versus 2019.
Future spending plans take into account potential market volatility as the economy recovers from the pandemic.
“We are fully committed to growing shareholder value by meeting the world’s energy demands today and pursuing a technology-driven strategy to succeed through the energy transition,” Darren Woods, chairman and chief executive officer, said at the company’s annual investor day.
“Our investments are expected to generate returns of greater than 30 percent,” said Woods. “And 90 percent of our upstream investments in resource additions, including in Guyana, Brazil and the U.S. Permian Basin, generate a 10 percent return at $35 per barrel or less. Downstream investments improve net cash margin by 30 percent and our Chemical investments grow high-value performance products by 60 percent.”
To grow shareholder value through the transition to a lower carbon economy, ExxonMobil has focused its extensive research and development portfolio on technologies to address hard to de-carbonize sectors of the economy responsible for approximately 80 percent of energy-related emissions — commercial transportation, power generation and heavy industry.
The company’s newly created business, ExxonMobil Low Carbon Solutions, was established to commercialize low-emission technologies, and will initially focus on carbon capture and storage (CCS), the process of capturing CO2 that would otherwise be released into the atmosphere from industrial activity, and injecting it into deep geologic formations for safe, secure and permanent storage.
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