Global energy firm ExxonMobil has revealed it is to increase its spending on greenhouse gas emission-reduction projects by $15 billion over the next six years.
The firm’s CEO said the company’s healthy balance sheet had enabled it to invest further funds into its efforts to transition to low carbon energy production.
The firms said its plans “support the corporate strategy of continued structural cost savings, investment in low-cost-of-supply and lower-emission products, and further portfolio high-grading, positioning the company to double earnings and cash flow by 2027 versus 2019”.
The company also announced it is on track to meet its 2025 greenhouse gas emission-reduction plans by year-end 2021, four years ahead of schedule. In addition, ExxonMobil said it has developed “more aggressive” plans for further Scope 1 and Scope 2 reductions through 2030, consistent with Paris Agreement pathways.
“The restored strength of our balance sheet and improved financial outlook support accelerating investment in our industry-advantaged, high-return projects, and a growing list of financially accretive lower-emission business opportunities,” said Darren Woods, chairman and chief executive officer. “Our strategy is designed to create shareholder value by leveraging our competitive advantages while maintaining flexibility to respond to future policy changes and technology advances associated with the energy transition.”
Projected growth of cash flow and earnings in the upstream business results from aggressive cost reductions and progressing advantaged investments in low-cost-of-supply projects in Guyana, Brazil, and the Permian Basin in the United States, said the firm. More than 90% of Upstream planned capital investments through 2027 are expected to generate returns of greater than 10% at prices less than or equal to $35 per barrel of oil equivalent, while reducing Upstream GHG emissions intensity by 40-50% through 2030, compared to 2016 levels.
Downstream and Chemical earnings and cash flow growth plans are focused on high-return projects, which are expected to double the volume of valuable performance chemicals and lower-emission fuels and lubricants. The company will leverage its industry-leading manufacturing scale, integration, and technology position to high-grade its portfolio and reduce costs, while optimizing operations and leveraging the capabilities of the Low Carbon Solutions business to reduce greenhouse gas emission intensity at operated facilities.
As part of its plan, ExxonMobil has committed $15 billion for lower-emission investments through 2027. These investments will include a balance between projects to reduce greenhouse gas emissions from existing operations and increased investments in its Low Carbon Solutions business.
“The same capabilities, technical strengths and market experience that support base energy and chemical businesses will help drive commercial growth opportunities for carbon capture and storage, biofuels and hydrogen where supportive policies currently exist and provide for strong returns,” the energy company revealed. “ExxonMobil is on track to exceed its 2025 greenhouse gas emission-reduction plans announced in December 2020. The company anticipates year-end 2021 results to show a reduction of 15-20% in greenhouse gas intensity from Upstream operations compared to 2016 levels, four years ahead of schedule. This is supported by an anticipated reduction of 40-50% in methane intensity and 35-45% in flaring intensity compared to 2016.”
“The focused actions we have taken have enabled us to accelerate greenhouse gas reductions particularly in the areas of methane and flaring,” said Woods. “We anticipate meeting our 2025 greenhouse gas emission-reduction plans ahead of schedule, which gives us confidence to set more aggressive medium-term goals across all of our businesses.”