Exxon to invest US$20 bln in US petrochem, refining projects

09-Mar-17

Exxon Mobil Corp plans to invest US$20 bln through 2022 to expand its chemical and oil refining plants on the US Gulf Coast, Chief Executive Darren Woods said in a speech at CERAWeek, as per Reuters report. Some of the expansions began in 2013, but the scope of the project is now growing and the timeline extended.
Woods ran Exxon's refining division before becoming CEO two months ago, and the new spending benefits a sector with which he has significant experience and comfort. Investments in the high-margin projects should help ease concerns from Wall Street that Exxon's growth potential—especially in oil and gas exploration and production—is sliding.

"Exxon Mobil is building a manufacturing powerhouse along the US Gulf Coast," Woods said. "These businesses are leveraging the shale revolution to manufacture cleaner fuels and more energy-efficient plastics."

The investments across Texas and Louisiana will take advantage of cheap shale gas to make plastics and other chemicals for export. The strategy builds on prior steps Exxon and peers, including Dow Chemical Co, have taken in the wake of the American shale expansion, which sharply cut production costs. "The supply is here. The demand is there. We want to keep connecting those dots," Woods said.

Exxon last month pledged to boost this year's spending by 16% to expand operations, especially in shale production, after the company posted a better-than-expected quarterly profit, helped by rising oil prices and lower costs.