Before its investor day, US oil major ExxonMobil announced that it expects its focus on profitable, high-return projects to result in its investments generating returns in excess of 30%.
Of course, 2020 was not a particularly good year for the oil industry, with lockdown restrictions around the world leading to a slump in the demand for oil. This caused ExxonMobil to post its first annual loss since 1999, when Exxon merged with Mobil, which is now used to brand the company’s range of industrial lubricant and grease products.
In a statement before its yearly investors’ day, however, ExxonMobil CEO and Chairman Darren Woods said:
“Our investments are expected to generate returns of greater than 30 percent. And 90 percent of our upstream investments in resource additions, including in Guyana, Brazil and the U.S. Permian Basin, generate a 10 percent return at $35 per barrel or less.”
The company also announced plans to cut the intensity of its greenhouse gas emissions by 15–20% over the next few years. It said it intended to accelerate its development of its technologies for hydrogen and carbon capture, saying that it was in a good position to compete in these two areas.
Nevertheless, it also said it needed to continue investing in new oil and gas projects in the long term to compensate for the loss of production from depleted fields. It plans to make $16–19 billion in capital spending this year, with this set to rise to $20–25 billion in subsequent years.