Exxon CEO: To Invest over $37B on Capital Projects this Year - CNBC

HOUSTON (Dow Jones Newswires), Oct. 7, 2011

ExxonMobil Chief Executive Rex Tillerson said Thursday the company expects to spend a record $37 billion on capital projects this year, almost 9% more than it has previously said it was planning to invest.

"We are investing over $37 billion this year," Tillerson said during an interview with CNBC. "We will do more in the U.S. if we are given the opportunity to do so."

ExxonMobil, the world's largest publicly traded oil company by market value, in March said it expected to invest about $34 billion this year and between $33 billion and $37 billion annually through 2015.

Separately, Tillerson also said that the strong global oil supply is likely to be the main factor driving the recent decline in oil prices, which are trading about 28% below this year's peak of over $114 a barrel in May. "What we are seeing in the oil price picture is that the supply fundamentals are actually pretty strong right now," Tillerson said. "Demand has been sluggish here in the U.S.; globally [oil demand] is where we expect it to be."

Light, sweet crude for November delivery settled up $2.91, or 3.7%, at $82.59 a barrel on the New York Mercantile Exchange. November Brent crude contracts on the ICE Futures Europe exchange were up $3.00, or 2.9%, at $105.73 a barrel.

ExxonMobil's acquisition last year of natural-gas producer XTO Energy for $25 billion was a "recognition of how significant the unconventional resources are going to be," Tillerson said. Exxon Mobil expects unconventional resources, such as shale oil and gas, to increase five-fold in the next five years.

The head of ExxonMobil said the global economy is likely to continue growing but at a slower pace than previously anticipated. "We are going to continue, I'm afraid, to be in a fairly sluggish economic environment in this country," Tillerson said. "Globally, the economy is probably not going to perform quite as robust as we have expected because the U.S. and Europe are a big piece of that regardless of how well China does."

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