Digital Annual Report

Upstream

ExxonMobil's Upstream is a global leader in the exploration, development, and production of oil and natural gas resources.

Adjusted earnings(1) increased by

80 percent

to $14 billion

(1) Adjusted earnings excludes U.S. Tax Reform and Impairments. See Frequently used terms.
 

5 discoveries

throughout 2018 in Guyana
Permian tight-oil production increased

100 percent

by year end
As the most active operator in the Permian at year-end 2018, we are focused on safe, reliable operations to support growth.

Business fundamentals

Demand for oil is expected to increase approximately 20 percent from 2016 to 2040 and will remain the primary source of energy for commercial transportation and continue to serve as a critical feedstock for chemical products. Natural gas demand is expected to grow nearly 40 percent over the same period, largely from expanding industrial activity and increasing use in power generation as utilities look to switch to lower-emission fuels.

To meet this demand and offset natural decline rates of approximately 5 to 7 percent per year, increased supplies, requiring significant investment, for both oil and natural gas are needed. We also expect global liquefied natural gas (LNG) volumes to more than double by 2040, primarily to supply Asian and European markets.

Competitive advantages

Proprietary exploration technologies were key to the discovery of more than 5 billion barrels of resource in Guyana across 10 discoveries through 2018. Guyana is one of the most significant play openings across the industry in recent years. These discoveries are enabling us to rapidly build a portfolio of deepwater projects that will leverage our leading project-development expertise.

We leveraged scale and financial capacity to aggressively bid for attractive acreage in Brazil, acquiring more acreage than any other major international oil company in recent years. We now possess a high-quality portfolio of deepwater development and exploration opportunities in Brazil with multibillion-barrel potential.

The combined fundamentals of low-cost development, an integrated business model, and a continued focus on technology are allowing us to maximize value from the Permian. We are positioned to deliver decades of low-cost, highly profitable production that will move through an efficient logistics network and serve as advantaged feedstock for U.S. Gulf Coast refineries and chemical plants.

We demonstrate functional excellence with leading technical and commercial capabilities that are critical to developing some of industry’s lowest-cost LNG supplies in the frontier countries of Papua New Guinea and Mozambique. These developments will strengthen our global LNG portfolio and will leverage our technical, operational, and project experience in frontier areas.

In 2018, the World Oil and Gas Council recognized ExxonMobil as the “Explorer of the Year” for the second year in a row. The award is a recognition of the talented people working in our Upstream and the success they have achieved in discovering world-class resources.

Upstream statistical recap

 
  2018 2017 2016 2015 2014
Earnings (millions of dollars) 14,079 13,355 196 7,101 27,548
Liquids production (net, thousands of barrels per day) 2,266 2,283 2,365 2,345 2,111
Natural gas production available for sale (net, millions of cubic feet per day) 9,405 10,211 10,127 10,515 11,145
Oil-equivalent production(1) (net, thousands of barrels per day) 3,833 3,985 4,053 4,097 3,969
Proved reserves replacement ratio(2)(3) (percent) 318 189 69 111
Resource additions(3) (millions of oil-equivalent barrels) 1,297 9,763 2,453 1,378 3,206
Average capital employed(3) (millions of dollars) 177,874 174,674 170,055 169,954 164,965
Return on average capital employed(3) (percent) 7.9 7.6 0.1 4.2 16.7
Capital and exploration expenditures(3) (millions of dollars) 20,194 16,695 14,542 25,407 32,727

(1) Natural gas converted to oil-equivalent at 6 million cubic feet per 1,000 barrels.
(2) Proved reserves exclude asset sales.
(3) See Frequently used terms
Note: Unless otherwise stated, production rates, project capacities, and acreage values are gross.