With the objective to more than double earnings and cash flow from operations by 2025 at today’s fuel prices, ExxonMobil has come up with an outlinedaggressive growth strategy.
Darren W. Woods, chairman and chief executive officer remarked that they have got the best portfolio of high-quality, high-return investment opportunities that they’ve seen in two decades.“Our plan takes full advantage of the company’s unique strengths and financial capabilities, using innovation, technology and integration to drive long-term shareholder value and industry-leading returns.”
Steps to increase earnings by more than 100 percent – to $31 billion by 2025 at 2017 prices – from last year’s adjusted profit of $15 billion include the growth plans which will exclude the impact of U.S. tax reform and impairments.
Double-digit rates of return in all three segments of ExxonMobil’s business – upstream, downstream and chemical – which are all three world-class businesses in their own right is projected by this plan.
The company expects in the upstream, to significantly increase earnings through a number of growth initiatives involving low-cost-of-supply investments in U.S. tight oil, deepwater and liquefied natural gas (LNG). Production is expected to be increased from 4 million oil-equivalent barrels per day to about 5 million as a result of growth coming online from new and existing projects.
Tight-oil production five-fold is planned to be increased by the company from the U.S. Permian Basin and start up 25 projects worldwide, with these startups adding volumes of more than 1 million oil-equivalent barrels per day. The company expects to bring on new production to meet a projected increase in global demand, in LNG.
ExxonMobil’s industry-leading exploration success and strategic acquisitions will be benefited by upstream growth. The company added 10 billion oil-equivalent barrelsin 2017 aloneto its resource base in locations including the Permian, Guyana, Mozambique, Papua New Guinea and Brazil.
By 2025, ExxonMobil’s downstream business is projected to double earnings, by upgrading its product slate through strategic investments at refineries
By enabling increased production of higher-value products, such as ultra-low sulfur diesel, chemicals feedstocks and basestocks for lubricants, these projects are expected to result in double-digit returns. The company’s 2025 downstream margins are projected to increase by 20 percent, as a result of these improvements.
“We are uniquely positioned to take advantage of the global demand growth for higher-value products in the downstream and chemical. Our combined strengths in innovative technology, resource and market access, marketing product leadership and integration improve profitability and create significant shareholder value,” said Woods. PWKD14032018