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World's biggest oil and energy exploration company Exxon Mobil Corp. (NYSE: XOM, XOM:US) on Wednesday laid out plans till 2025, highlighting the following:
- Boost earnings and cash flow
- Emphasis on growth of dividends
- Focus on project funding and debt slashing.
It is speculated that these decisions have been taken by the management in order to rebuild investor confidence after recording loss for the first time in four decades.
The year 2020 for Exxon at a glance:
After a stressful 2020, the stocks of the energy giant managed to deliver a return of seven per cent in the past one year.
Apart from recording a sharp decline in the quantum of barrels of oil drilled, Exxon had to stop drilling in Canada's Sandy bogs area due to rising costs in the last one year.
What to expect from the announcement?
Exxon CEO Darren Woods is optimistic about the strategic decisions taken by the management and hopes that it would generate a return upward of 30 per cent.
The company from here on will be cautious about future spending and will focus on projects that fetch high return with low gestation period.
(Source: Kalkine Media 2020)
According to Exxon Mobil official sources, it is likely to focus on areas such as heavy industry, commercial transport, power generation etc.
Such industries fall under challenging sectors of the economy and are responsible for around 80 per cent of carbon and related emissions.
The planned capital spending would be as follows:
- US$16 - US$19 billion in 2021 alone.
- Thereafter US$20 - US$25 billion every year up to 2025.
Some new board appointments:
On March 2, a federal judge ordered Exxon Mobil to pay a civil penalty of US$14.25 million on an 11-year-old lawsuit alleging violations of Clean Air Act.
Following pressure from environmental and energy activists, the Texas-based energy giant on Monday appointed activist investor Jeff Ubben as a member of the board.
Earlier Exxon added Petronas CEO Tan Sri Wan Zulkiflee Wan Ariffin.
Cut Singapore workforce by 7%?
In another development Exxon Mobil Corp. on Wednesday said that it will cut around 300 positions at its Singapore facility by the end of 2021.
This accounts for about seven per cent of the total workforce in Singapore division, which employs over 4000 people.
CMD of Singapore affiliate Geraldine Chin while expressing regret on this inevitable step also assured that the company is doing everything to support the laid off employees during this transition.
