ExxonMobil Details Plans to Lead in Earnings and Cash Flow Growth, Energy Transition
- Annual Investor Day presentation outlines strategic priorities to increase shareholder returns, outperform competition and grow value in lower-emissions future
- Plans are flexible to increase lower-emission investments based on pace of the energy transition
- Driving structural reductions of $9 billion a year by 2023 compared to 2019
IRVING, Texas–(BUSINESS WIRE)–ExxonMobil today detailed plans at its annual Investor Day to deliver industry-leading earnings, cash flow growth and shareholder returns, and lead in the energy transition across a range of lower-emissions scenarios.
“We are focused on leading the industry in safety, reliability, environmental performance, earnings and cash flow growth – and ultimately shareholder returns,” said Darren Woods, chairman and chief executive officer. “We’ll continue to innovate and provide solutions that meet the growing needs of society, including its net-zero emissions ambitions, by fully leveraging our competitive advantages of scale, integration, technology, functional excellence, and our highly skilled people.”
Company plans include annual structural reductions of $9 billion a year by 2023 compared to 2019, building on $5 billion annual structural reductions achieved to date. These savings and other improvements, including a streamlined organizational structure, will enable ExxonMobil to double earnings and cash flow potential by 2027 versus 2019, reduce breakeven costs by roughly $10 per barrel, boost returns on capital employed, and sustainably grow total shareholder returns and distributions.
Full-year 2021 results of $23 billion in earnings and $48 billion in cash flow from operating activities were the highest among competition and demonstrate how structural improvements, combined with focused investments during the down cycle, positioned the company to realize the full benefit of the economic recovery.
The 2021 results enabled repayment of about $20 billion in debt — nearly all of the debt borrowed during the pandemic downturn, the 39th consecutive year of dividend increases, and a $10 billion share-repurchase program that started earlier this year.
To improve future earnings, ExxonMobil is upgrading its portfolio with low-cost-of-supply opportunities by investing in advantaged assets, including Guyana and the U.S. Permian Basin. It is also investing in competitively advantaged chemicals and downstream projects, including Gulf Coast Growth Ventures, to grow high-value product sales of performance products and lubricants.
The company expects capital investments of $21-$24 billion in 2022 and $20-$25 billion per year through 2027. These investments are directed toward low-cost-of-supply Upstream projects in unconventional, deepwater and LNG, and high-value products including chemical performance products, biofuels and lubricants in the new Product Solutions business, which will combine downstream and chemical operations into a single company on April 1.
Spending plans also include more than $15 billion over the next six years to reduce greenhouse gas emissions in company operations and for investments in lower-emission business opportunities to help customers reduce emissions and generate attractive returns for shareholders.
“Investment in emission-reduction opportunities will accelerate with advances in technology, market incentives and supportive policy,” said Woods. “We’ve built a portfolio with flexibility to adjust investments between our traditional oil, gas and products business and new lower-emissions opportunities, consistent with the pace and scale of the energy transition, creating long-term value across a broad range of scenarios.”
ExxonMobil established its Low Carbon Solutions business in early 2021 to commercialize its extensive experience in carbon capture and storage, hydrogen and biofuels. Since that time, the company has announced progress on multiple carbon capture and storage opportunities around the world. It also is planning strategic investments in hydrogen, including at its integrated refining and chemical complex in Baytown, Texas, and in lower-emission biofuels at the Strathcona refinery near Edmonton, Canada.
ExxonMobil has stated its ambition to achieve Scope 1 and Scope 2 net zero greenhouse gas emissions for operated assets by 2050, backed by a comprehensive approach to develop detailed emission-reduction roadmaps for major facilities and assets.
The company’s 2030 emission-reduction plans include net-zero emissions for Permian Basin operations by 2030 and a 20-30% reduction in company-wide Scope 1 and Scope 2 greenhouse gas emissions intensity, compared to 2016.
The plans are anticipated to achieve a 40-50% reduction in upstream greenhouse gas intensity, supported by a corporate-wide 70-80% reduction in methane intensity and a 60-70% reduction in flaring intensity. In total, the plans are expected to reduce company-wide absolute greenhouse gas emissions by an estimated 20% and the company’s upstream emissions by 30%. Absolute flaring and methane emissions are expected to decrease by 60% and 70%, respectively. These plans are expected to achieve the goals of the World Bank Zero Routine Flaring by 2030 initiative.
ExxonMobil, one of the largest publicly traded international energy companies, uses technology and innovation to help meet the world’s growing energy needs. ExxonMobil holds an industry-leading inventory of resources, is one of the largest refiners and marketers of petroleum products, and its chemical company is one of the largest in the world. To learn more, visit exxonmobil.com and the Energy Factor.
Outlooks; projections; goals; ambitions; estimates; discussions of earnings, cash flow, margins, rate of return, and recoverable resources; and descriptions of strategic plans and objectives are forward-looking statements. Similarly, emission-reduction roadmaps are dependent on future market factors, such as continued technological progress and policy support, and also represent forward-looking statements. Actual future results from our capital plans, lower-emissions spending and structural cost reductions efforts; ambitions to reach Scope 1 and Scope 2 net zero from operated assets by 2050, to reach Scope 1 and 2 net zero in Upstream Permian Basin operated assets by 2030, to eliminate routine flaring in-line with World Bank Zero Routine Flaring, to reduce methane emissions, to meet ExxonMobil’s emission reduction plans, divestment and start-up plans, and associated project plans as well as technology efforts; success in or development of future business markets like carbon capture, hydrogen or biofuels; drilling programs and improvements; reserve and resource additions; accounting asset carrying values and any increases or impairments; and planned integration benefits could differ materially due to a number of factors. These include global and regional changes in the demand, supply, prices, differentials or other market conditions affecting oil, gas, petroleum, petrochemicals and feedstocks; the evolution of the energy market compared to our investments in current and future potential markets; company actions to protect the health and safety of employees, vendors, customers, and communities; the ability to bring new technologies to commercial scale on a cost-competitive basis, including carbon capture projects, biofuel projects and hydrogen projects; policy and consumer support for lower-emissions products and technologies in different jurisdictions; regulatory actions targeting public companies in the oil and gas industry; changes in law, taxes, regulation, or policies, including environmental regulations, political sanctions, and international treaties; the timely granting or freeze, suspension or revocation of government permits; reservoir performance and depletion rates; the outcome of exploration projects and the timely completion of development and construction projects; future distribution decisions; regional differences in product concentration and demand; the ability to access short- and long-term debt markets on a timely and affordable basis; the severity, length and ultimate impact of future pandemics and government responses on people and economies; global population and economic growth; war, trade agreements, shipping blockades or harassment and other political or security concerns; the resolution of contingencies and uncertain tax positions; the impact of fiscal and commercial terms and the outcome of commercial negotiations; feasibility and timing for regulatory approval of potential investments or divestments; the actions of competitors; the capture of efficiencies between business lines; unexpected technological developments; general economic conditions, including the occurrence and duration of economic recessions; unforeseen technical or operating difficulties; and other factors discussed here, in Item 1A. Risk Factors in our Form 10-K for the year ended December 31, 2021 and under the heading “Factors Affecting Future Results” on the Investors page of our website at www.exxonmobil.com under the heading News & Resources. The forward-looking statements and dates used in this press release are based on management’s good faith plans and objectives as of the March 2, 2022 date of this press release, unless otherwise stated. We assume no duty to update these statements as of any future date and neither future distribution of this press release nor the continued availability in archive form should be deemed to constitute an update or re-affirmation of these figures as of any future date. Any future update of these statements will be provided only through a public disclosure indicating that fact.
Forward-looking statements contained in this press release regarding the potential for future earnings, cash flow, structural cost reductions, total shareholder return and breakevens, are not forecasts of actual future results. These figures are provided to help quantify the potential future results and goals of currently-contemplated management plans and objectives including new project investments, plans to replace natural decline in Upstream production with low-cost volumes, plans to increase sales in our Downstream and Chemical segments as they transition to a Product Solutions business, the development of a Lower Carbon Solutions business, continued highgrading of ExxonMobil’s portfolio through our ongoing asset management program, both announced and continuous initiatives to improve efficiencies and reduce costs, capital expenditures and cash management, and other efforts within management’s control to impact future results. These figures are intended to quantify for illustrative purposes management’s view of the potential for these efforts over time, calculated on a basis consistent with our internal modelling assumptions for factors such as working capital, as well as factors management does not control, such as interest, differentials, and exchange rates. Prices used in illustrating business potential are not intended to reflect management’s forecasts for future prices or the prices we use for internal planning purposes.
ExxonMobil reported emissions, including reductions and avoidance performance data, are based on a combination of measured and estimated data. Calculations are based on industry standards and best practices, including guidance from the American Petroleum Institute (API) and IPIECA. The uncertainty associated with the emissions, reductions and avoidance performance data depends on variation in the processes and operations, the availability of sufficient data, the quality of those data and methodology used for measurement and estimation. Changes to the performance data may be reported as updated data and/or emission methodologies become available. ExxonMobil works with industry, including API and IPIECA, to improve emission factors and methodologies, including measurements and estimates.
Definitions and additional information concerning certain terms used in this release including are provided in the Frequently Used Terms available on the Investor page of our website at www.exxonmobil.com under the heading News & Resources and in the March 2, 2022 Analysts’ Day material referenced below.
The term “project” as used in this release can refer to a variety of different activities and does not necessarily have the same meaning as in any government payment transparency reports. The term “performance products” refers to chemical products that provide differentiated performance for multiple applications through enhanced properties versus commodity alternatives and bring significant additional value to customers and end-users.
Actions needed to advance the Company’s 2030 greenhouse gas emission-reductions plans are incorporated into its medium-term business plans, which are updated annually. The reference case for planning beyond 2030 is based on the Company’s Energy Outlook research and publication, which contains the Company’s demand and supply projection based on its assessment of current trends in technology, government policies, consumer preferences, geopolitics, and economic development. Reflective of the existing global policy environment, the Energy Outlook does not project the degree of required future policy and technology advancement and deployment for the world, or ExxonMobil, to meet net zero by 2050. As future policies and technology advancements emerge, they will be incorporated into the Outlook, and the Company’s business plans will be updated accordingly.
This release summarizes highlights from ExxonMobil’s 2022 Analysts’ Meeting held on March 2, 2022. For more information concerning the forward-looking statements, defined terms, and other information contained in this release, please refer to the complete Analysts’ Meeting presentation (including important information contained in the Cautionary Statement and Supplemental Information sections of the presentation) which is available live and in archive form through ExxonMobil’s website at www.exxonmobil.com.