ExxonMobil unveils 5-year growth plan; to boost capital spend
PARIS, March 3, 2021
ExxonMobil today (March 3) outlined its plans through 2025 to increase earnings and cash flow to sustain and grow its dividend, cut debt and fund advantaged projects, while working to commercialize lower emission technologies in support of the goals of the Paris Agreement.
Unveiling the roadmap, the oil giant said it will have a 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 per cent in 2020 as a result of the pandemic.
The company also reduced cash operating expenses by 15 per cent in 2020 and is expecting permanent structural savings of $6 billion a year by the end of 2023 versus 2019.
"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," stated Chairman and CEO Darren Woods at the company’s annual investor day.
"Our investment portfolio is the best we’ve had in over 20 years, and will grow earnings and cash flow in the near term while remaining flexible to market conditions and benefiting from ongoing cost-reduction efforts," noted Woods.
"Looking ahead, we’re working to reduce our emissions and develop solutions, such as carbon capture and low-carbon hydrogen, needed to de-carbonize the highest emitting sectors of the economy – a critical requirement for society to achieve its net zero ambition," he added.
According to him, the future spending plans will take into account potential market volatility as the economy recovers from the pandemic.
"Our investments are expected to generate returns of greater than 30 percent," noted Woods.
“And 90 per cent of our upstream investments in resource additions, including in Guyana, Brazil and the US 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," he added.-TradeArabia News Service
