Find out more at btsub.sg/promo
You are here
Exxon pleases Trump with US$20b shale export building spree
[CHICAGO] Exxon Mobil Corp's US$20 billion building spree in the heart of the US chemical and refining industry will create 45,000 jobs and boost US efforts to feed Asian demand, the company's new leader said. President Donald Trump couldn't be happier.
Following Chief Executive Officer Darren Woods's announcement of the projects on Monday, Mr Trump described Exxon as a "true American success story" in a statement.
The president followed up with a trademark tweet: "We are already winning again, America!" and a White House video.
After decades of locating refineries and chemical plants close to raw materials and end markets in the Middle East and East Asia, Exxon is committed to steering construction dollars to its home country, Mr Woods said at the CERAWeek energy conference in Houston.
The plan involves 11 projects in the Gulf Coast region, some of which were in the works as far back as 2013.
"These projects are export machines, generating products that high-growth nations need to support larger populations with higher standards of living," Mr Woods said.
"The supply is here; the demand is there. We want to keep connecting those dots." Exxon followed other US giants such as Ford Motor Co, Intel Corp, General Motors Co and Wal-Mart Stores Inc responding to Mr Trump's call to eschew overseas investments and focus on domestic developments.
Like those other plans, Exxon didn't specify how much of the 10-year investment program was previously announced. All the jobs will be located along the Gulf Coast, and many will pay an average of US$100,000 a year, Mr Woods said. The investments will continue at least through 2022, Mr Woods said in only his second public appearance since January, when he succeeded Rex Tillerson, who left the CEO job to become Trump's secretary of state.
Mr Woods' comments followed Exxon's disclosure last week that it's shifting half its worldwide drilling budget to US shale fields next year.
One of the projects includes the construction of an ethane cracker at Exxon's Baytown, Texas, chemical complex that began in June 2014 and was projected to employ 10,000 construction workers and spur 4,000 additional full-time positions. Another was the expansion of Exxon's Mont Belvieu, Texas, polyethylene plant, where work began around the same time. The company didn't say how much the investments would cost.
"This is exactly the kind of investment, economic development and job creation that will help put Americans back to work," Mr Trump said in a statement.
"Many of the products that will be manufactured here in the United States by American workers will be exported to other countries, improving our balance of trade."
Like Exxon bosses before him, in his remarks Monday, Mr Woods championed "free and fair trade" as essential for economic growth and corporate profitability. That stance may veer from Mr Trump's repeated criticisms of various international trade deals, including the North American Free Trade Agreement with Canada and Mexico, as unfair and disadvantageous to US workers.
Mr Woods, a 52-year-old Exxon lifer, inherited a company hobbled by the biggest reserves reduction in its modern history and the loss of the platinum credit rating it held for 85 years as a 2-1/2-year collapse in crude markets destroyed cash flow.
The expansion programme, dubbed "Growing the Gulf" by Exxon, hews close to Mr Woods' pedigree as a quintessential downstream executive, or one who focused on refineries and chemicals for most of his career.
Mr Woods' comments at CERAWeek may presage major themes up for debate at the oil industry's biggest annual conference. He was preceded at the conclave by Russian Energy Minister Alexander Novak; luminaries yet to appear during the week-long conference include Saudi Oil Minister Khalid Al-Falih, Opec Secretary General Mohammad Barkindo, and the CEOs of Royal Dutch Shell Plc, Chevron Corp, Total SA and BP Plc.
Mr Woods, an electrical engineer by training who initially joined Exxon as an analyst, also touted the Irving, Texas-based company's research and investments in carbon capture, biofuels and other ventures meant to address climate change.
He also panned government subsidies, trade restrictions and other market interventions intended to prop up green energy sources: "They are more expensive and lead to poor investment decisions, focused on the limitations imposed, not true innovation."
The tone of Mr Woods address was in marked contrast to the bleak pronouncements that dominated CERAWeek gatherings in the previous two years as crude prices were in retreat and the industry retrenched, firing hundreds of thousands of workers and canceling billions of dollars in investments.
"The world's energy industry, represented here today, is the engine of the world's economy," Mr Woods said.
"As we look forward, our opportunity is to grow."