Exxon Mobil Corporation, based in Irving, is planning to save an extra $3 billion in costs by the end of 2023 as it looks to take advantage of high oil prices and boost shareholder returns.
The plan was announced during Exxon’s Investor Day, just hours after the company cut decades-old ties with Russia due to the country’s invasion of Ukraine.
By the end of 2023, ExxonMobil plans to cut structural costs by $9 billion, 50% more than it initially announced. This will enable the company to double its earnings and potential for cash flow by 2027, boost returns on employed capital, and increase shareholder returns and distributions.
“We are focused on leading the industry in safety, reliability, environmental performance, earnings, and cash flow growth – and ultimately shareholder returns,” said ExxonMobil CEO and Chairman Darren Woods in a statement.
He further stated: “We’ll continue to innovate and provide solutions that meet the growing needs of society, including its net-zero emissions ambitions, by fully leveraging our competitive advantages of scale, integration, technology, functional excellence, and our highly skilled people.”
The company stated the financial results of $23 billion in earnings for 2021 enabled repayment of about $20 billion in debt, which was almost all of the money it borrowed amidst the downturn it took during the pandemic.
ExxonMobil is expecting capital investments in the amount of $21-$24 billion in 2022 and $20-$25 billion each year until 2027. The investments will include low-cost-of-supply Upstream projects in unconventional, deepwater, and liquified natural gas. They will also include high-value products such as chemical performance products, biofuels, and lubricants.
The spending plan additionally includes $15 billion over the next six years dedicated to reducing greenhouse gas emissions in Exxon’s company operations, as well as investing in lower-emission business opportunities.
ExxonMobil started its Low Carbon Solutions business in early 2021 to commercialize its substantial experience in carbon capture and storage, hydrogen, and biofuels. The company has stated that it hopes to achieve Scope 1 and Scope 2 net zero emissions for operated assets by 2050.
