MOSCOW (MRC) -- ExxonMobil will relocate its corporate headquarters to the Houston area from suburban Dallas and combine its chemical and refining divisions in a major shake-up aimed at reducing costs, as per the company's press release.
The oil giant’s top executives, who have worked out of the famous “God Pod” office park in Irving for more than three decades, will make the move about 230 miles (370 kilometers) to the southeast by mid-2023, Exxon said in a statement Monday. The company will also reorganize along three main business lines: upstream, which produces oil and natural gas; product solutions, which makes fuels and chemicals; and its low-carbon division.
It’s a sweeping overhaul for the company that traces its roots to John D. Rockefeller’s Standard Oil Trust in the 19th century and will bring executives under the same roof as rank-and-file employees in its Houston-area campus. The moves will accelerate Exxon’s aggressive cost-cutting drive, which is on track for USD6 B of savings by 2023, enough to fund about 40% of annual dividend payouts.
“Closer collaboration and the new streamlined business model will enable the company to grow shareholder value and position ExxonMobil for success through the energy transition,” Chief Executive Officer Darren Woods said in the statement.
Exxon’s top managers will move into the company’s biggest US office in suburban Spring, Texas, which opened under former CEO Rex Tillerson in 2014. The modern, glass-walled campus is split into several buildings with a central common area adorned with plants and water features.
It’s not the first time that the Houston campus has absorbed staff from other offices. At the end of last year, Exxon announced plans to close two Houston-area office towers, known as Hughes Landing, after a raft of employee departures.
Under the three main business units, Exxon will merge support services into a new division called ExxonMobil Technology and Engineering, to be led by Linda DuCharme, who previously led upstream integrated solutions and business development. Karen McKee, the former chemical boss, will run ExxonMobil Product Solutions.
While Exxon is one of the S&P 500’s top performers in 2022, it’s been a hard few years for the company. The pandemic forced Woods to pivot away from his $200 B, seven-year growth strategy toward a low-spending model after debt ballooned in 2020. The following year, activist investor Engine No. 1 won support from shareholders to replace a quarter of the company’s board after criticizing its financial performance and approach to climate change.
As MRC reported before, earlier this month, ExxonMobil and SABIC successful started up Gulf Coast Growth Ventures world-scale manufacturing facility in San Patricio County, Texas. The new facility will produce materials used in packaging, agricultural film, construction materials, clothing, and automotive coolants. The operation includes a 1.8 MM metric tpy ethane steam cracker, two polyethylene (PE) units capable of producing up to 1.3 MM metric tpy, and a monoethylene glycol (MEG) unit with a capacity of 1.1 MM metric tpy.
Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.
According to MRC''s ScanPlast report, Russia's estimated PE consumption totalled 2,265,290 tonnes in the first eleven months of 2021, up by 14% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,363,850 tonnes in January-November, 2021, up by 25% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding PP random copolymers decreased significantly.
ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world's oil and about 2% of the world's energy.