Report April 2, 2019
Message from the Chairman
As we mark the 20th anniversary of the merger that brought together Exxon and Mobil, we do so with our strongest portfolio of investments in two decades. It positions us to deliver attractive returns for you, our shareholders, far into the future.
Report April 2, 2019
Message from the Chairman
In 2018, we laid out a growth strategy designed to take advantage of the unique strengths that have made ExxonMobil an industry leader. These include a sharp focus on fundamentals; dedication to innovative technology; deep integration across our businesses; disciplined investment in advantaged projects; and industry-leading execution from our highly skilled workforce. Our goal is to significantly increase the earnings and cash flow generation capacity of our business.
In last year’s volatile margin and price environment, we generated earnings of $21 billion and cash flow from operations and asset sales of $40 billion – the highest since 2014. This strong performance enabled us to fund attractive investments, reduce debt, and increase the dividend by 6 percent – the 36th consecutive annual increase.
Our growth strategy takes advantage of our scale and expertise across each of our business lines.
In the Upstream, we achieved many important milestones including advancements in five key worldclass projects that will add significant new production.
In Guyana, multiple discoveries have raised our estimate of recoverable resources to more than 5 billion barrels of oil equivalent. We are fast-tracking development and expect oil production to start in 2020. In another deepwater development area, we increased our holdings to approximately 2.3 million net acres in Brazil’s pre-salt basins, where we plan to start drilling in 2019.
Onshore, we accelerated operations in the Permian Basin in Texas and New Mexico, building on our 2017 acquisition of high-quality, contiguous acreage that will enable significant low-cost production growth.
Our investments in this prolific region remain profitable at $35 per barrel. Integration through transportation investments linking this production to our refining and chemical assets allows us to capture additional value – from the wellhead to the consumer.
And we are working to add additional low-cost production in Papua New Guinea and Mozambique, where we are progressing new liquefied natural gas (LNG) projects.
Our successes in Upstream development were recognized in 2018 by the World Oil and Gas Council, when they honored ExxonMobil as “Explorer of the Year” – for the second consecutive year.
In our Downstream business, we progressed six major refining investments, all of which are advantaged versus industry. Three started up last year, including the Beaumont hydrofiner, the Antwerp delayed coker, and the Rotterdam advanced hydrocracker. These Downstream investments deliver higher-value products and are expected to generate 20-percent returns.
In our Chemical business, we moved forward on 13 new facilities to meet growing demand. Seven of these came online by the end of last year. The remaining six are on schedule. These investments, enhanced by our technologies and global supply chain, are expected to support 30-percent sales growth by 2025.
Across all of our operations, we are committed to maintaining a safe work environment enriched by diversity and characterized by open communications and trust. We strive to continuously improve and achieve the highest standards of excellence in all that we do.
This includes upholding the highest standards of corporate citizenship. We maintain high ethical standards, obey all applicable laws, rules, and regulations, and respect local and national cultures.
We are also dedicated to reducing environmental impacts and managing the risks of climate change. Society faces a dual challenge: meeting growing energy needs while protecting the environment. ExxonMobil is playing our part by reducing greenhouse gas emissions from our operations and making products that help our customers limit theirs. We are also leading the way in developing low-carbon technologies like carbon capture and storage and advanced biofuels.
ExxonMobil’s story spans more than 135 years. From supplying the fuel and lubricants for the first airplane in the early 20th century, to providing cleaner-burning natural gas to power entire cities today, it has been a history of meeting our customers’ changing needs and expectations. It has been one of continual improvement and innovation. And it has been a record of creating significant value for our shareholders and for society.
Building on this history, I believe the chapter we are writing today will be the most rewarding yet.
Chairman and CEO
TechnologyA steadfast commitment to investments in technology has led to a history of innovation and the development of industry-advantaged assets, processes, products, and applications. Technology has allowed us to effectively respond to a dynamic and challenging landscape with changes in sources of supply, consumer demand, and regulatory requirements. We invest in fundamental science and research, leading to advances in existing processes and products, as well as new discoveries. This allows us to meet the evolving needs of society, lower operating and project costs, and develop higher-value products and applications. Learn more
ScaleThe size and breadth of our business provide a critical foundation for long-term success. It enables investments in the development of advanced technologies by leveraging benefits across a large base of operations. Facilities and businesses operated consistently around the globe accelerate experience and learning – replicating innovations, improving effectiveness, and driving down cost. Our size allows us to pursue a wide range of value-accretive investments across the commodity price cycle – specifically taking advantage of counter-cyclical opportunities. Learn more
IntegrationOur business spans various hydrocarbon value chains from end-to-end, involving production of raw materials into highvalue fuels, lubricants, chemical products, and unique customer applications. We maximize value across the entire chain, ensuring the whole is greater than the sum of the parts. As markets evolve and value shifts up or down the chain, we are positioned to capture it. The different sectors we serve and products we make provide further diversification, helping to mitigate the impact of commodity price cycles. Our integrated business provides additional scale, allows us to share support organizations and facility infrastructure, and capture synergies in organizational capabilities and competencies. Learn more
Functional excellenceAn extensive history of running a complex global business with a focus on the long term has led to a strong culture of consistently doing the right things, the right way, at a high standard. How we achieve results is as important as the results themselves. Living this philosophy and learning from our collective experiences has resulted in a deep knowledge in critical disciplines and industry-leading execution capabilities. These strengths manifest themselves in all facets and functions of our business through a disciplined and consistently executed approach. Learn more
PeopleThe above advantages and the synergies that exist between them have taken generations to establish and serve as the foundation for our strategies. The benefits, though, are only realized through the commitment and hard work of our people – our most important advantage. We strive to hire the best and develop world-class capabilities through challenging, cross-functional assignments and global experiences. Strong retention and career-long tenures result in unmatched capabilities and knowledge, anchored in a culture of excellence. Learn more