ExxonMobil capex target ticks up for 2023, mid-term spending range affirmed

Dec. 8, 2022
The energy giant’s leaders have beefed up their planned lower-emission investments through 2027 by $2 billion.

Increases in spending on a number of fronts will lift 2023 capital expenditures (capex) at ExxonMobil Corp., Houston, to $23-25 billion from about $22 billion this year. But the global giant’s leaders said Dec. 8 that they are sticking to their capex target range of $20-25 billion for the 4 following years.

In an update to their corporate plan, chairman and chief executive officer Darren Woods and chief financial officer Kathy Mikells also said ExxonMobil will increase its investments in lower-emission projects by 2027 to roughly $17 billion from $15 billion and that it will ramp up share buybacks to a combined $50 billion in the next 2 years from $15 billion in 2022.

The ExxonMobil team forecast 2023 upstream production of 3.7 million boed, level with its 2022 projection. The 2023 number will incorporate recent divestitures as well as the company’s departure from Russia; combined, those two elements accounted for about 260,000 boed of production this year.

Mikells said ExxonMobil has “a growing portfolio of attractive opportunities” in carbon capture and sequestration and hydrogen projects, among other low-emission work. The company will spend a little less than $2 billion next year on such projects and—boosted in part by the tailwinds of the Inflation Reduction Act—will grow that number to about $3 billion in 2025 and nearly $6 billion in 2027.

“Our expectation is that policy and technology will continue to evolve,” she said, noting that these investments should comfortably generate returns of more than 10%. “As this market develops, there will be more investment opportunities that can compete for capital.”

Looking out to 2027, Mikells said, ExxonMobil’s leaders are targeting 4.2 million boed of production. Driving much of that roughly 14% growth until then—and accounting for a major share of 2023’s capex bump—will be its operations in Guyana and the Permian basin. In the former, output is expected to climb to more than 850,000 boed from 360,000 in third-quarter 2022. In the Permian, forecasts call for production to grow to more than 800,000 bed compared with 560,000 in third-quarter 2022.

Shares of ExxonMobil (Ticker: XOM) rose nearly 1% Dec. 8 to $104.42. Over the past six months, they have risen slightly, pushing the company’s market capitalization to $430 billion.