Decarbonisation business could outgrow

oil: Exxon executive

Published Tue, Apr 04, 2023 · 10:20 pm

Exxon energy transition plans lean heavily on reducing carbon emissions from its own operations,
which it is spending US$10 billion by 2027 to implement. PHOTO: REUTERS
 ExxonMobil

EXXON Mobil’s Low Carbon unit has the potential to generate hundreds of billions
of US dollars over time and outperform the company’s traditional oil and gas
business, top executive Dan Ammann told Reuters.
The largest US oil producer on Tuesday (Apr 4) lays out to investors the aims of its
emerging energy transition strategy in a meeting with Wall Street. Exxon foresees a
future less prone to commodity price swings through predictable, long-term
contracts with customers striving to reduce their own carbon footprint.
“This business is going to look quite a bit different than the base business of Exxon
Mobil,” vowed Ammann, president of Exxon’s two-year-old Low Carbon Business
Solutions unit. “It is going to have a much more stable, or less cyclical, profile.”
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How quickly that vision becomes a reality will depend on regulatory and policy
support for carbon pricing – something the US has not broadly accepted – and the
cost to abate greenhouse gas emissions, among other changes, he said.
“We will put out some parameters for how we see that growth unfolding,” Ammann
said, declining to comment on whether expectations for rising oil prices underpin
the strategy.
Exxon is one of the most oil- and gas-focused companies among Western oil
producers, a strategy that delivered record profits for its investors last year as
fossil fuel prices soared. Unlike its peers, Exxon has stayed away from renewable
energy like solar and wind. Its energy transition plans lean heavily on reducing
carbon emissions from its own operations, which Exxon is spending US$10 billion by
2027 to implement.

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The company is investing another US$7 billion to commercialise three technologies

to reduce greenhouse gases: carbon capture and storage, hydrogen as a fuel and
biofuels.
The three have a combined market potential of US$6.5 trillion by 2050, equivalent
to the traditional oil and gas business, the company estimates.
Exxon on Tuesday disclosed that it signed a long-term agreement with New-York
traded Linde, adding a new client to its portfolio of companies looking to pay
to decarbonise their own operations.
Under the agreement, Exxon will transport and permanently store up to 2.2 million
metric tons of carbon dioxide each year from Linde’s hydrogen production facility.
Exxon has expectations to make “robust double-digit returns in the business” built
off these long-term contracts, Ammann said. REUTERS
KEYWORDS IN THIS ARTICLE
 Decarbonisation

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