Exxon To Spend $15B On GHG Reduction Projects By 2027
Supermajor ExxonMobil will increase spending to $15 billion on GHG emission-reduction projects over the next six years while maintaining disciplined capital investments in its industry-leading portfolio.
ExxonMobil said that it decided to commit $15 billion for lower-emission investments through 2027. These investments will include a balance between projects to reduce GHG from existing operations and increased investments in the Low Carbon Solutions business.
Exxon stated that it was on track to meet its 2025 greenhouse gas emission-reduction plans by year-end 2021, four years ahead of schedule. The company also developed more aggressive plans for further Scope 1 and Scope 2 reductions through 2030, consistent with Paris Agreement pathways.
The company also anticipates year-end 2021 results to show a reduction of 15-20 percent in GHG intensity from upstream operations compared to 2016 levels. This is supported by an anticipated reduction of 40-50 percent in methane intensity and 35-45 percent in flaring intensity compared to 2016.
“The focused actions we have taken have enabled us to accelerate greenhouse gas reductions particularly in the areas of methane and flaring,” said Darren Woods, chairman and CEO, of Exxon. “We anticipate meeting our 2025 greenhouse gas emission-reduction plans ahead of schedule, which gives us the confidence to set more aggressive medium-term goals across all of our businesses.”
According to Exxon, the new medium-term greenhouse gas reduction plans for 2030 are consistent with Paris Agreement-aligned pathways and include a 20-30 percent reduction in corporate-wide intensity, a 40-50 percent reduction in upstream intensity, a 70-80 percent reduction in corporate-wide methane intensity, and a 60-70 percent reduction in corporate-wide flaring intensity
These plans are expected to reduce absolute corporate-wide GHG emissions by approximately 20 percent. The company also plans to achieve the goals of the World Bank for zero routine flaring no later than 2030.
ExxonMobil’s 2030 GHG emission-reduction plans cover Scope 1 and Scope 2 greenhouse gas emissions from assets operated by the company compared to 2016 levels. For assets not operated by the company, it will work with its partners to achieve comparable results.
In the same statement, ExxonMobil said its capital investments would remain in the $20-$25 billion per year range through 2027 with the flexibility to adjust to adverse market conditions or changes in policy and technology for low-emissions projects and the energy transition.
“The restored strength of our balance sheet and improved financial outlook support accelerating investment in our industry-advantaged, high-return projects, and a growing list of financially accretive lower-emission business opportunities,” Woods added.
The projected growth of cash flow and earnings in the upstream business results from aggressive cost reductions and advantaged investments in low-cost-of-supply projects in Guyana, Brazil, and the Permian Basin.
More than 90 percent of Upstream planned capital investments through 2027 are expected to generate returns of greater than 10 percent at prices less than or equal to $35 per barrel of oil equivalent.
Increased cash flow and earnings enable further debt reduction and returns to shareholders. To date in 2021, the company has repaid $11 billion in debt and expects to be comfortably within the range of its targeted debt-to-capital ratio of 20-25 percent by year-end. It has also announced a $10 billion share-repurchase program over 12-24 months that will commence in 2022, and it increased its annual dividend payment for the 39th consecutive year.
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