ExxonMobil Plans More Than 20 Project Start-Ups Through 2008
Exxon Mobil Chairman and CEO Rex Tillerson told analysts at the New York Stock Exchange that ExxonMobil's financial strength, technological expertise, and resource base allow it to meet the challenges of today's increasing demand for energy while delivering industry-leading returns.
"The world's energy needs are expected to be nearly 50 percent greater by 2030 than they are today," said Tillerson. "Our industry remains massive and very much a long-term, capital-intensive business. Projects require years to develop, cost billions of dollars to bring on stream, and they operate for decades."
The project inventory at year-end 2005 will develop 26 billion oil-equivalent barrels net to ExxonMobil. The company expects to start up more than 20 new global projects in the next three years.
Investing in Profitable Opportunities
Tillerson pointed out that in 2005 ExxonMobil invested a record of nearly $18 billion into the business. "Our investment strategy has remained consistent over the years. It is not driven by short-term swings in commodity prices or earnings. We are long-term driven and patient, and we are not opportunity constrained," said Tillerson. "Standing back from the annual spending patterns confirms the consistency of our approach as we have invested more than we have earned over the last 15 years.
"The growing trend in capital expenditures is a direct result of the rich portfolio of investment opportunities in our inventory, our ability to mature many world-class opportunities to our investment standards and to successfully progress the execution of these opportunities," he said.
Tillerson believes that ExxonMobil's technology leadership continues to open doors to resource opportunities through cost-effective solutions for challenging environments and for frontier resources such as oil sands, tight gas and extra-heavy oil. "In 2005, we spent more than $700 million. Our five-year average (from 2000 thru 2004) exceeds $600 million per year," said Tillerson.
Delivering Superior Results
When it comes to delivering superior return on investments, Tillerson pointed out that ExxonMobil led the industry in 2005 with return on capital employed (ROCE) of 31 percent. "In our view, ROCE continues to be the best overall measure of financial performance given the long-term and capital-intensive nature of our industry. I would be cautious of anyone who tries to deemphasize it," said Tillerson. "Some seem to have focused on other metrics to guide what they view to be in the best interest of their shareholders. As I think is evident by the results of this past year, their approaches such as buying or growing volumes simply for the sake of increasing volumes does not produce superior returns," Tillerson said.
Operates 13 Offshore Rigs
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