Darren Woods shares strategy for long-term growth in lower-carbon future with employees

Last week we held our annual Investor Day, describing in detail our strategies and business plans. I was proud to share the results of your hard work and our plans for the future. I thought I’d provide an overview of the presentation that the management committee made.

A lot has happened since last year’s Investor Day, which took place as the devastating impact of COVID-19 was just emerging. In the year that’s followed, we faced historic lows in our businesses and a challenging economic environment.  We dealt with personal impacts involving families and friends. And, we made some difficult, but necessary, changes to improve the competitiveness of our company. 

Despite these challenges, we: 

• Achieved our best ever safety and reliability performance;
• Maintained an uninterrupted supply of essential energy and products; 
• Advanced an industry-leading portfolio of advantaged investment opportunities; 
• Delivered critical efficiencies to significantly lower costs; 
• Achieved our 2020 emission reduction goals and developed aggressive plans for additional reductions by 2025.

In short, we’ve emerged one year later a stronger company - positioned for future success.

Going forward, our plans leverage our core competitive advantages to deliver sustained value while helping the world transition to a lower-carbon future. Upgrading our asset portfolio while progressing industry-leading investments will grow earnings and cash flow to sustain and grow the dividend, pay down debt and fund future projects. Our current portfolio of major project investments through 2025 generates returns of greater than 30 percent.

Of course, fundamental to our success, will be delivering industry leading safety and environmental performance, while continuing our drive for efficiencies and lower costs. To this end, we’ve already achieved $3 billion in structural reductions. Our current plans deliver an additional $3 billion in annual savings by year-end 2023.  As we go forward, we will stay focused on how we can deliver further improvements by leveraging the corporation’s scale and integration.

Turning to the environment, we’ve made significant progress in reducing our greenhouse gas emissions and have solid plans for reducing them further. In addition, we have a robust development portfolio of technologies and products that will help us and our customers achieve additional reductions.

As we’ve advanced research into more cost-effective technology for carbon capture, the carbon capture and storage (CCS) venture we established in 2018 has made good progress in developing a number of potential projects.  With this progress and growing government and market interest, we launched the ExxonMobil Low Carbon Solutions business. Leveraging our project expertise, operating experience, facilities footprint and longstanding leadership in CCS, we believe this new business will help accelerate broad-scale deployment of value accretive CCS investments. It could also advance investments in hydrogen as the technology to lower production cost matures.

Capitalizing on these emerging technologies and market opportunities could significantly reduce CO₂ emissions and help society achieve the ambitions of the Paris Agreement – which we’ve supported since its inception.  It can also help us grow shareholder value.

As we work toward a lower-carbon future, we will continue to responsibly meet today’s demand for the energy and products needed to support modern life.

In the Upstream, we have a world class portfolio of attractive investments with flexibility to adjust spend as market conditions evolve. Roughly 90 percent of our investments to develop resources generate a 10 percent return at $35 per barrel or less.  We’re making outstanding progress in Guyana and the Permian, and see great potential in Brazil.  In the Downstream, we are improving net cash margin primarily through conversion projects at advantaged sites and in Chemical, growing high-value performance products by 60 percent. The projects that start up from 2021 to 2025 will provide approximately 40 percent of the corporation’s cash flow in 2025 and, along with structural cost reductions, help to double our earnings.

I hope that all of you take pride in what we’ve accomplished and the challenges we’ve overcome. I hope too, that you take pride in the role our company is playing in meeting the world’s need for energy and products essential to modern life, while helping protect the environment and advancing toward a lower-carbon future.

While there is much to do and more challenges to overcome, there is no organization more capable or committed. 

Thank you for this and all you do.