US oil major ExxonMobil said on Wednesday it is managing unprecedented market challenges from the COVID-19 pandemic while preserving long-term value to shareholders.
Chairman and Chief Executive Officer Darren Woods told shareholders during the company’s annual meeting that despite the current volatility and near-term uncertainty, the long-term fundamentals that drive the company’s business remain strong and unchanged.
“Our objective is to strengthen the structure and earnings power of our business through industry-advantaged projects to provide a solid foundation for generating cash, reliably growing the dividend and maintaining a strong balance sheet,” Woods said during the meeting, which was held virtually to reduce health risks from the pandemic.
The oil price crash has hit the upstream sector hard with deep cuts being made by companies across the board.
In response to these challenges, ExxonMobil announced in April that it would be reducing its 2020 capital spending by 30 percent, to approximately $23 billion, and lowering its cash operating expenses by 15 percent. Woods said the company has identified opportunities to reduce capital expenditures without compromising project advantages or returns.
“We’ve adjusted our business plans in response to market conditions and are working hard to ensure we maintain the value of our portfolio of industry-leading opportunities,” he said. “While these are uncertain times, some things remain unchanged – including the fundamentals that underpin our business, our long-term plan, and commitment to grow value for shareholders.”
Woods thanked the company’s workforce for quickly adapting and adjusting manufacturing operations to deliver much-needed raw materials to assist medical professionals and first responders fighting COVID-19 on the front lines.
The CEO provided an overview of ExxonMobil’s performance in 2019, when the company delivered earnings of more than $14 billion, achieved first oil production in Guyana, increased Permian production volumes nearly 80 percent, and began a multi-year exploration program offshore Brazil. In the Downstream, ExxonMobil brought three major refining projects online in Antwerp, Rotterdam and Beaumont. Its chemical operations broke ground on four major projects across Baytown, Baton Rouge and Corpus Christi.
Developing the numerous world-class deepwater discoveries offshore Guyana remains an integral part of ExxonMobil’s long-term growth plans. Current operations onboard the Liza Destiny production vessel are unaffected, and startup of the second phase of field development remains on target for 2022, with the Liza Unity production vessel currently under construction. The company is also awaiting government approval to proceed with a third production vessel for the Payara development.