ExxonMobil to Start Production at Record Number of New Oil and Gas Projects in 2014
- Ten major projects to add new capacity of 300,000 net oil equivalent barrels per day this year
- Capital spending to decline after peaking in 2013
- Company’s objective is to deliver profitable growth while maintaining disciplined capital allocation
NEW YORK--(BUSINESS WIRE)-- Exxon Mobil Corporation (NYSE:XOM) expects to start production at a record 10 major projects in 2014, adding new capacity of approximately 300,000 net oil equivalent barrels per day and contributing to profitable production growth, Rex W. Tillerson, chairman and chief executive officer, said today.
“These projects exemplify our focus on maintaining a diversified portfolio and highlight our ability to grow profitable volumes,” Tillerson said at the company’s annual investment analyst meeting at the New York Stock Exchange.
“We are adding new volumes that improve our profitability mix with higher liquids and liquids linked natural gas volumes. We’re also driving increased unit profitability through better fiscal terms and reducing low-margin barrel production.”
ExxonMobil’s capital spending will decline to $39.8 billion this year from a peak of $42.5 billion in 2013, Tillerson said. Excluding potential acquisitions, capital expenditures are expected to average less than $37 billion per year from 2015 to 2017.
“We have financial flexibility to pursue potential strategic opportunities and maintain a disciplined and selective approach to capital that ensures any new investment will contribute to robust cash flow growth,” Tillerson said.
A liquefied natural gas project in Papua New Guinea and the largest offshore oil and gas platform in Russia are among significant projects scheduled for startup this year. Others include a heavy oil expansion project in Canada and deepwater projects in the Gulf of Mexico.
ExxonMobil anticipates additional project startups in the next few years in several countries, including Australia, Indonesia, Canada, Nigeria and the United States. All of these projects are expected to add about 1 million net oil equivalent barrels per day by 2017. In North America, ExxonMobil’s near-term production outlook is made up of significant high-margin, low-risk liquids growth. The company’s production outlook also reflects strategic choices made to improve unit profitability while maintaining disciplined capital allocation.
“We have a balanced and diversified portfolio that gives us a fundamental competitive advantage,” Tillerson said. “Resource and geographic diversity across the portfolio enables us to mitigate risks in a dynamic market environment and maximize profitability through changing business cycles.”
The company is pursuing more than 120 high-quality projects to develop about 24 billion oil equivalent barrels of oil and natural gas.
ExxonMobil’s Downstream and Chemical businesses are focused on strengthening the portfolio and delivering sustained, industry-leading financial performance across the business cycle. Midstream investments in North America will expand ExxonMobil’s logistics capabilities to transport crude oil and finished products. Other advantaged projects will increase production of high-value products.
“In the Downstream and Chemical segments, we are diversifying feedstocks through our flexible and integrated system, continuously pursuing operating efficiencies and maximizing sales of higher-margin lubes, diesel and chemical products,” Tillerson said.
During the meeting, ExxonMobil reviewed its 2013 performance and outlined future plans. Highlights include:
- For the 20th-consecutive year, ExxonMobil replaced more than 100 percent of production. In 2013, the company added proved oil and gas reserves totaling 1.6 billion oil-equivalent barrels, including a 153 percent replacement ratio for crude oil and other liquids. At yearend 2013, proved reserves totaled 25.2 billion oil equivalent barrels, comprised of 53 percent liquids and 47 percent natural gas.
- ExxonMobil continues to outpace competitors in return on average capital employed at 17.2 percent in 2013, about three-and-a-half percentage points higher than its nearest competitor.
- Liquids production is expected to grow 2 percent in 2014 and 4 percent annually from 2015 to 2017, representing the majority of ExxonMobil’s total production increase.
- Liquids and liquids linked natural gas are projected to account for 69 percent of the company’s total production by 2017, improving the profitability mix of the portfolio.
- ExxonMobil is pursuing investment opportunities to expand its Chemical business and serve major growth markets. These projects build on unmatched integration with the Upstream and Downstream operations and employ proprietary technologies to increase high-value product sales.
ExxonMobil, the largest publicly traded international oil and gas company, uses technology and innovation to help meet the world’s growing energy needs. ExxonMobil holds an industry-leading inventory of resources, is the largest refiner and marketer of petroleum products, and its chemical company is one of the largest in the world. For more information, visit www.exxonmobil.com or follow us on Twitter www.twitter.com/exxonmobil.
CAUTIONARY NOTE: Statements of future events or conditions in this release are forward-looking statements. Actual future results, including production growth and mix, capital expenditures, unit profitability, and project plans, capacities, and schedules, could differ materially due to changes in long-term oil and gas price levels and other market conditions affecting the oil, gas, and petrochemical industries; political or regulatory developments; changes in economic growth rates around the world; reservoir performance; timely completion of development projects; the outcome of commercial negotiations; the actions of competitors; technical or operating factors; and other factors discussed under the heading "Factors Affecting Future Results" in the Investor Information section of our website (www.exxonmobil.com) and in Item 1A of our most recent Form 10-K.
Proved reserve figures in this release are based on current SEC definitions. For years prior to 2009 reflected in our 20-straight years of at least 100% replacement, proved reserve volumes were determined on bases that differed from SEC definitions in effect at the time. Specifically, for years prior to 2009, reserves were determined using the price and cost assumptions we use in managing the business, not the historic prices used in the SEC definitions. Reserves also include oil sands and equity company reserves for all periods, which were excluded from SEC reserves prior to 2009. The reserves replacement ratio is calculated for a specified period utilizing the applicable proved oil-equivalent reserves additions divided by oil-equivalent production.
References to "oil equivalent barrels" and similar terms include quantities of oil and gas that are not yet classified as proved reserves but that we believe will be produced in the future. For definitions and additional information concerning the calculation of Return on Average Capital Employed, including information required by SEC Regulation G, see “Frequently Used Terms” on the Investor Information section of our website (www.exxonmobil.com).
The term “project” as used in this release does not necessarily have the same meaning as in any government payment transparency reports.
Media Relations, 972-444-1107
Source: Exxon Mobil Corporation
Released March 5, 2014