ExxonMobil: Low Carbon Ops Drive Higher 2025 Capex Spend
12/06 9:00 AM
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 potential. 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 from 2050. 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. (c) Copyright 2023 DTN, LLC. All rights reserved.