Exxon Mobil plans to invest more than $100 billion through 2030 to boost global energy supplies, chief executive Darren Woods said on October 30 after the company reported third quarter profit of $15.4 billion, more than double a year earlier. About 10 percent of the spending, roughly $10 billion, is focused on the refining business, in particular existing facilities including Baton Rouge in Louisiana and Beaumont in Texas, to improve yields and raise margins on high value products such as lubricants and chemicals.
Woods framed refining, not crude supply, as the crunch point. Diesel demand remains high and inelastic, he told CNBC, while refining capacity is constrained. Exxon’s refineries are running at record utilisation with diesel yields at record levels, and the company expects its investments in US refineries to raise distillate production by another 100,000 barrels a day, without giving a specific period.
The refining segment earned a record $9.05 billion in the quarter, nearly five times a year earlier, and the shares closed up 2.1 percent at a record intraday high of $188.50 on the results. Woods said the company has been investing selectively in its large refineries and will continue to look for ways to leverage existing facilities to make higher margin products.
The spending plan is a statement of intent across the portfolio rather than a set of sanctioned projects, and Exxon did not break out the remaining 90 percent by segment in the comments reported. The signal for infrastructure markets is the direction of travel: the largest US oil company is putting incremental capital into downstream capacity at existing sites, where returns are currently highest, instead of into new greenfield refining.