Posted on Leave a comment

ExxonMobil to increase capital spending to boost production

Oil Gas

US-based oil major is poised to gradually reverse the austerity it imposed on itself in 2020, when energy prices crashed in the wake of the COVID-19 pandemic.

The company spent some $23 billion in annual capital and exploration expenditure last year, and was previously expecting to spend $20–25 billion in the years through to 2027. This is now expected to rise to $23–25 billion next year, and $22–27 in the subsequent years.

The company also expects to spend $3 billion more on low-carbon projects in the coming years, with this now reaching $20 billion between 2022 and 2027.

The chief executive of ExxonMobil, Darren Woods, said about this:

“We remain committed to providing the energy and products that raise living standards around the world, while building a new business to reduce emissions in hard-to-decarbonise parts of the economy.”

ExxonMobil, which makes the Mobil coolant and grease range, is also close to buying the Permian Basin’s largest oil producer, Pioneer Natural Resources, for some $60 billion. Together with increased investment in prominent assets like its Guyana operations and its existing plays in the Permian, the company hopes to increase its oil production to 4.2 million barrels a day by 2027, an increase of 10% on its current value.

The move from ExxonMobil could herald a wider shift to increased spending in the industry, which has tended to focus more on optimising returns for shareholders by maintaining capital discipline since the energy price crash of 2020.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.