02 Feb 2021
Posted in Oil & Gas
ExxonMobil sends a clearer message on its approach to lower carbon emissions, says GlobalData
Following the latest report quarterly report from the company
Adrian Lara, Senior Oil & Gas Analyst at GlobalData, a leading data and analytics company, offers his view on the approval:
“I think what is certainly different from the recent quarterly calls in 2020, is the emphasis on how the company has met flaring and methane emission reduction targets, and what it plans to do in terms of carbon capture and storage (CCS). ExxonMobil claims to have captured about 40% of all the CO2 captured since the 1970s. The company has even introduced a new business unit that will focus on technological solutions for lowering carbon emissions.
On the other hand, the company continues to emphasize the importance of its oil and gas business, upstream and chemicals in particular. Projects in Guyana, Brazil and Permian are still driving growth and prioritized as key developments. The company has a capital-flexible strategy to guarantee a level of dividend even in the low end of oil price at US$45 per barrel.
“As reported in media during the last days, Exxon has been approached by some activist investors that considered the company’s strategy with respect to clean energy not to be satisfactory. It seems that the company’s reaction is the right one before bigger and more influential investors also start asking for adjustments.
Indeed, in this presentation the company has provided figures for their performance with respect to greenhouse emissions reduction, CCS and the amount of renewable generated power it directly buys. By 2025 the commitment is for 11% to 13% of emission reductions with respect to 2016. Exxon Mobil is a large, sophisticated company with financial flexibility, and so it’ll be interesting to see how the company actively joins the energy transition scene. It is also relevant that this change in the emphasis about climate change, coincides with the new US administration re-joining the Paris Climate Agreement and executing changes directly affecting the oil and gas industry.