In the two months since taking the helm, Exxon Mobil CEO Darren Woods is demonstrating a willingness to stray from the oil industry pack.
Woods has been with Exxon since 1992, holding senior management positions in the refining and chemical businesses. Now, as Chairman and Chief Executive, he is looking to put his stamp on a company known for conservative shifts in course: He has endorsed the Paris climate agreement committing countries to cutting greenhouse gas emissions, despite the new US administration’s indifference towards climate change. He also supports a carbon tax, and weeks after taking the top job, named respected climate scientist Susan Avery to the board of directors.
Woods also has grand ambitions for drilling and refinery expansion, at a time when many of Exxon’s competitors are cutting back on investment. His plans include a big increase in capital and exploration spending, starting at $22 billion in 2017 and building to an average of $25 billion annually through 2020. As the company seeks to increase reserves and potentially ramp up production, investment will be spread across the globe – from Texas to Guyana, with major projects in Angola, Canada, Russia, Qatar and the United Arab Emirates.
To be sure, the company Woods now leads has its share of troubles. Exxon was saddled with enough debt to lose its AAA credit rating in 2016. Its annual profit, at $7.8 billion last year, was a fraction of investors’ expectations. “Exxon’s balance sheet is the worst in 35 years”, said Fadel Gheit, a senior oil company analyst at Oppenheimer & Company. “Their financial situation has deteriorated rapidly over the last five years, and this in my view is alarming.”
Acknowledging that the oil market remains volatile, Woods said Exxon’s strong assets will enable it to thrive in the long term. Exxon has had positive news lately. It has taken the lead in drilling in offshore Guyana, where it made potentially one of the most significant oil finds in decades. Before his departure, former CEO Rex Tillerson closed a deal for a giant oilfield in the Permian Basin.
As the New York Times reports, Exxon also announced “the discovery of a large oil field off the shores of Nigeria, started drilling in Liberia, increased investments in gas production and exports in Papua New Guinea and expanded refineries in Singapore and the Netherlands.”
Could Exxon, at the same time, be heading in a more progressive direction? Executives say they expect advances in their development of biofuels and batteries, as well as carbon capture and sequestration technologies – which, apart from protecting the environment, could help secure the future of fossil fuels. “We have a commitment to fundamental science”, Woods told investors. “As society looks for affordable energy solutions with lower greenhouse gas emissions, advancement of technology will be critical.”
