Exxon Mobil Corp. expects to start production on a record 10 major projects in 2014, adding new capacity of approximately 300,000 barrels per day (bpd) of net oil equivalent and contributing to profitable production growth, according to Rex W. Tillerson, chairman and CEO.
“These projects exemplify our focus on maintaining a diversified portfolio and highlight our ability to grow profitable volumes,” Tillerson said March 5 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 heavy oil expansion project in Canada and deepwater projects in the Gulf of Mexico are among the significant projects scheduled for startup this year. 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 bpd of net oil equivalent 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 projects worldwide to develop the equivalent of about 24 billion 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.