Exxon pursues high-growth business strategy for 2017
Exxon says it expects to spend 16 per cent more this year than in 2016. Wikimedia Commons photo by Brian Katt.
Analysts critical of Exxon Mobil’s ability to sustain growth
Exxon Mobil Corp fought off Wall Street concerns that the world’s largest publicly traded oil producer has lagged Chevron Corp and other peers in working to replace oil and gas reserves needed for future profitability.
While at Exxon’s annual analyst day in New York, the company’s Chief Executive Officer, Darren Woods, told Reuters “Our job is to compete and succeed in any market.”
Despite Woods’ confidence, only five Wall Street analysts tracking Exxon recommend buying shares. Reuters reports 17 analysts advised buying Chevron shares.
Following the departure of Rex Tillerson in January to take the position of US secretary of state, Darren Woods tried to demonstrate to Wall Street that the investment potential with Exxon was positive.
The company showed it was working on short term projects in North Dakota and Texas and larger projects in Russia, Qatar, the UAE, Angola and Canada which are scheduled to be online later in 2017.
All told, Exxon’s production should be increased to between 4 million and 4.4 million barrels of oil equivalent per day by 2020. In 2016, Exxon produced 4.1 million barrels of oil equivalent per day.
In 2016, Exxon failed to replace 100 per cent of its oil and gas reserves with new projects.
This year, the company expects to spend $22 billion, up about 16 per cent from 2016. Woods says spending by the Texas-based company should increase to about $25 billion by the end of the decade.
On Wednesday, Exxon shares rose by 2 per cent, even though the price of oil fell slightly.
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