Exxon Mobil CEO sets plan to boost spending

NEW YORK: Exxon Mobil Corp plans to boost capital spending for several years, CEO Darren Woods said, and the largest US oil company’s shares fell after he laid out a strategy to “lean in” while the rest of the industry cuts back.
Exxon shares fell more than 1 per cent after the company told analysts attending its annual investor meeting that it plans to lift spending by 10 per cent or more for the next several years as rivals are sidelining equipment and capping spending to boost shareholder returns.
Woods defended the strategy of “leaning in as our competitors are leaning back,” saying the best time to buy into projects is not when everyone else is active. “You do it when everybody else is at home,” Woods said.
Exxon’s plans include a big bet on US shale, where output has surged in recent years, making the United States the world’s largest oil producer.
Exxon shares finished down 91 cents at $79.28 on Wednesday. The stock has underperformed rivals for years and Woods faces challenges to boost investor confidence. He took over as chief executive in 2017, with a mission to boost sagging production and repair missteps made under former CEO Rex Tillerson, including expensive bets on natural gas and Russia. Capital spending will rise to $33 billion to $35 billion next year from $30 billion this year and from $23.1 billion in Woods’ first year as CEO.
“With investors increasingly pressuring energy companies to return cash to shareholders, it is no surprise that the higher capital budget was not positively received by the market,” said Muhammed Ghulam, energy analyst with Raymond James.
— Reuters