ExxonMobil continues to spend through the downturn

ExxonMobil continues to exhibit the confidence befitting the world’s biggest western publicly listed oil company. It committed today to $28bn in capital spending in 2010 and $25bn – $30bn in investment per year, on average, through the year 2014.

This is significant, when one looks around at what is going on in the rest of the sector.

ConocoPhillips and Devon Energy are selling billions of dollars in assets as they restructure. And Chevron said this week it would cut a further 2,000 positions in its refining and marketing division as part of a wider plan to reduce its global downstream workforce by 3,900 employees – or about 20 per cent – over two years.

In contrast, Exxon said it was chugging along with its strong investment program of the last five years, which saw Exxon spend $110bn. Rex Tillerson, Exxon’s chief executive, said the ability to continue to spend through the global economic downturn underlined its strengths versus competitors that undertook massive writedowns, corporate reorganisations and delayed or cancelled projects.

In December, Exxon agreed to pay $31bn in stock for XTO Energy for a large position in the booming domestic natural gas scene. The deal includes a further $10bn in XTO debt. It also is pursuing a bid it made in October for a stake in Ghana’s Jubilee field, which the industry believes may form part of an oil coast stretching off west Africa, from Sierra Leone to Ghana. And Tillerson said Exxon’s capital spending plans are largely unaffected by the current global recession:

We are executing a large inventory of projects and many others are under develoment. Actual spending in a given year will vary depending on the pace and the progress of each project. However, we are anticipating an investment profile of approximately $28bn in 2010 and a range of $25bn to $30bn per year on avearge through the year 2014.

Those numbers underline the confidence Exxon has in its future. Even as the world talks of peak oil and the need to move into renewables, the company is secure enough in continued world demand for fossil fuels to spend billions investing in its future development.

Related links:

BP’s strategy presentation: growth, cost cuts, biofuels and more (FT Energy Source)

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