ExxonM banking on Guyana to sustain growth in face of declining global income

May 01, 2024 ExxonMobil, News, Oil & Gas

Chief Executive Officer (CEO) of ExxonMobil Corporation, Darren Woods

Kaieteur News – Chief Executive Officer (CEO) of ExxonMobil Corporation, Darren Woods, is confident that in face of the declining revenues globally because of a lower price for natural gas and other industry-related commodities, there is still a bright future ahead for shareholders in the company due to its investments in Guyana and expected returns.

“We’re making great progress on our plans to grow the earnings power of our existing businesses from investments in advantaged assets and higher-value products and further reduce structural costs. The company spent nearly $6 billion on capital and exploration projects in the quarter.” These investments, he said, “will drive high-margin production growth in areas like Guyana, Brazil, the Permian Basin, and LNG while increasing earnings from its product solutions.”

Guyana achieved quarterly gross production of more than 600,000 oil-equivalent barrels per day in by the time the ExxonMobil Led consortium operating in the Stabroek Block reached a final investment early last month on the sixth major development, Whiptail.

According, to Woods in reporting on the company’s performance for the first quarter of the fiscal year, “We delivered a strong quarter with continued growth in advantaged assets, such as Guyana, where production continues at higher-than-expected levels, contributing to historic economic growth for the Guyanese people. In Product Solutions, our strong turnaround performance on cost and schedule helped drive record first-quarter refining throughput.”

To this end, he reiterated “…looking ahead, we’re making great progress on our plans to grow the earnings power of our existing businesses from investments in advantaged assets and higher-value products, and further reduce structural costs. We are investing in technology to transform the molecules derived from oil and natural gas into products that extend our reach into new, high-value, high-growth markets to capture even greater value from our core competitive advantages.”

To this end, he was adamant strong advantaged volume growth primarily from Guyana and the Beaumont refinery expansion, and structural cost savings helped to offset lower base volumes from divestments, unfavorable entitlements and government-mandated curtailments, and higher expenses from scheduled maintenance. With the recent approval of its sixth development project in the Stabroek Block—Whiptail—Woods said, “the project will add about 250,000 BOE/d of capacity when it starts up in 2027. Exxon and its partners also remain on track to complete Yellowtail next year and Uaru in 2026.”

The company is also investing heavily in the Permian Basin. It has a potentially massive growth catalyst on the horizon from its pending $64.5 billion acquisition of Pioneer Natural Resources. Adding Pioneer would more than double Exxon’s output in the region to 1.3 million BOE/d. Meanwhile, it will give it the fuel to grow its production to 2 million BOE/d by 2027.

Reporting on Guyana’s contribution to the company’s overall portfolio, Woods reported that while its net overall production was 47,000 oil-equivalent barrels per day lower than the same quarter last year, the growth in advantaged Guyana volumes more than offset the earnings impact from lower base volumes due to divestments, government-mandated curtailments and unfavorable entitlement effects.

He additionally reported that excluding the impacts from divestments, entitlements, and government-mandated curtailments, net production grew 77,000 oil-equivalent barrels per day driven by the start-up of the Payara development in Guyana. Payara reached nameplate capacity of 220,000 barrels per day in mid-January, ahead of schedule, demonstrating excellence in project execution and operations. Exxon, unlike its Stabroek Block consortium partners, reported lower than expected earnings globally. In declaring revenues earned in its financial report yesterday, the corporation said its “first-quarter earnings were US$8.2 billion versus US$11.4 billion in the first quarter of 2023.” To this end, it was explained that its upstream first-quarter earnings were US$5.7 billion, a decrease of US$797 million compared to the same quarter last year while the prior-year period was also negatively impacted by tax-related identified items.”

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