Exxon Mobil Corp's Low Carbon business has the potential to generate hundreds of billions of dollars in revenue and outperform the company's traditional oil and gas as soon as a decade from now, CEO Darren Woods said, said Reuters.
The largest U.S. oil producer on Tuesday laid out to investors the aims of its emerging energy transition strategy in a meeting with Wall Street. Exxon is tackling what should be a multi-trillion market in 10 years or more, Woods said.
The result will be an Exxon less prone to commodity price swings through predictable, long-term contracts with customers striving to reduce their own carbon footprint.
"This business is going to look quite a bit different than the base business of Exxon Mobil," vowed Dan Ammann, president of Exxon's two-year-old Low Carbon Business Solutions unit. "It is going to have a much more stable, or less cyclical, profile."
How quickly that vision becomes a reality will depend on regulatory and policy support for carbon pricing - something the U.S. has not broadly accepted - and the cost to abate greenhouse gas emissions, among other changes, he said. Ammann declined to comment on whether expectations for rising oil prices underpin the strategy.
The company on Tuesday put out parameters for how it sees that growth unfolding, with carbon priced as much as three times current levels. Exxon is one of the most oil- and gas-focused companies among Western oil producers, a strategy that delivered record profits for its investors last year as fossil fuel prices soared.
Unlike its peers, Exxon has stayed away from renewable energy like solar and wind. Its energy transition plans lean heavily on reducing carbon emissions from its own operations, which Exxon is spending USD10 B by 2027 to implement.
Exxon is tackling carbon capture, hydrogen, biofuels, which it estimates have a combined potential of USD6.5 T by 2050, equivalent to the traditional oil and gas business.
We remind, ExxonMobil Corp has started up its long-planned project to expand light crude oil processing capacity by 250,000 b/d at ExxonMobil Product Solutions Co's integrated refining and petrochemicals complex along the US Gulf Coast in Beaumont, TX, US.
mrchub.com