ExxonMobil: Low Carbon Ops Drive Higher 2025 Capex Spend
OAKHURST, N.J. (DTN) --- ExxonMobil in its latest corporate plan reports
total annual capital expenditures and exploration expense of $23 billion to $25
billion in 2024 and $22 billion to $27 billion annually from 2025 through 2027.
The increase in capex beginning in 2025 is driven by the growth in
value-accretive Low Carbon Solutions opportunities to reduce emissions.
ExxonMobil is pursuing more than $20 billion of lower-emissions
opportunities through 2027, which represents the third increase in the last
three years, from an initial $3 billion in projects identified in early 2021.
This is in addition to the company's recent $5 billion all-stock acquisition of
Denbury, which expanded carbon capture and storage opportunities through access
to the largest CO2 pipeline network in the United States.
The company is pursuing a portfolio of opportunities in lithium, hydrogen,
biofuels, and carbon capture and storage that in aggregate is expected to
generate returns of approximately 15% and could reduce third-party emissions by
more than 50 million tons per annum by 2030. These lower emissions solutions
help address climate change and closely align with ExxonMobil's competitive
advantages and core capabilities. Approximately 50% of the planned investments
support building the company's Low Carbon Solutions business, which reduces
customers' greenhouse gas emissions.
"We continue to see more opportunities to harness our technology, scale, and
capabilities to implement real solutions to lower emissions and to profitably
grow our Low Carbon Solutions business," said Darren Woods, chairman and CEO.
"Success in accelerating emission reductions requires the development of
nascent markets. We need technology-neutral durable policy support, transparent
carbon pricing and accounting, and ultimately, customer commitments to support
increased investment. We're actively advocating for each of these areas so we
can grow a profitable, and ultimately large, low carbon business."
ExxonMobil said it is developing a leading position in lithium, fully
leveraging its upstream skills, such as geoscience, reservoir management, and
efficient drilling. It also taps the company's downstream capabilities in fluid
processing and extraction to separate the lithium from the brine. Work has
begun for the company's first phase of lithium production in southwest
Arkansas, an area known to have large, highly concentrated lithium deposits and
first production is expected in 2027. The company is evaluating further growth
opportunities in lithium globally. By 2030, ExxonMobil aims to produce enough
lithium to supply the manufacturing needs of approximately 1 million electric
vehicles per year.
The company recognizes the significant uncertainty in how the energy
transition and its low carbon business will develop and expects to pace
emissions-reduction investments, effectively allocating resources as markets,
customer commitments, and policy evolve. This minimizes the downside risks
while establishing an advantaged position to capture and maximize the upside
The balance of ExxonMobil's low carbon capital will be used to reduce its
own emissions in support of its 2030 emission reduction plans and its 2050
Scope 1 and 2 net-zero ambition. In the Permian Basin, the company is on track
to reach net-zero emissions for unconventional operations by 2030, and
previously announced it also expects to leverage its Permian greenhouse gas
reductions plans to accelerate Pioneer's net-zero ambition by 15 years, to 2035
The company's product solutions segment is leveraging scale and technology
advantages to nearly triple earnings potential by 2027 versus 2019. Product
solutions' earnings growth is being delivered through structural cost
reductions, strategic project execution that will double sales of high-value
products, and other earnings improvements such as higher reliability, more
efficient maintenance, facility optimization projects, and commercial
improvements including trading. The portfolio value is being continuously
upgraded through divestments of non-strategic assets and continued investment
in advantaged sites to increase high-value products such as the recent chemical
expansion in Baytown.
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