HOUSTON—Darren Woods, chairman and CEO of ExxonMobil Corp. (NYSE: XOM), said March 6 that the company will invest $20 billion in U.S. Gulf Coast states to build a “manufacturing powerhouse.”
Woods, in his first public address as CEO, told an audience at CERAWeek by IHS Markit that the company is taking advantage of shale resource supplies to invest in 11 projects that he said would be “export machines.” He also addressed the company’s recent Permian Basin transaction and restrictions to trade.
The “growing the Gulf” projects, generally along Texas and Louisiana, will generate production that “fast-growing nations need to support larger populations and higher standards of living,” Woods said. “The supply is here, the demand is there. We want to keep connecting those dots.”
Woods said the projects would create more than 45,000 jobs with many paying annual wages of $100,000.
“The United States is a leading producer of oil and natural gas, which is incentivizing U.S. manufacturing to invest and grow,” he said. “We are using new, abundant domestic energy supplies to provide products to the world at a competitive advantage resulting from lower costs and abundant raw materials. In this way, an upstream technology breakthrough has led to a downstream manufacturing renaissance.”
ExxonMobil most recently invested in its own shale resources in a Permian deal valued at $6.6 billion. The company said the 250,000 Delaware Basin acres add about 3.4 billion barrels of oil equivalent.
However, Woods said the New Mexico acreage is in the heart of the Permian and the company estimates 60 billion barrels of oil in place.
“There’s a real opportunity to be more effective and to apply technology and better processes to more effectively extract the resources out of that play,” he said.
Woods also spoke in favor of free energy trade, which he said helped lead the U.S. shale industry to become a major global player.
Free trade has become a substantive debate in Washington D.C., where President Donald J. Trump has already signed an executive order scuttling the Trans-Pacific Partnership.
Woods said it’s wise to reexamine trade agreements to make sure they are fair, but also free. The government should play a supportive role by opening trade channels and implementing smarter regulations.
“But policies in the form of subsidies, mandates and trade barriers only hinder progress,” Woods said. “They are more expensive and lead to poor investment decisions focused on the limitations imposed, not true innovation.”
Barriers hinder innovation, he said.
“The real drive to innovate comes from a competition in a free market,” he said.” It comes from all of us striving together to meet societies needs. When we win, we are rewarding in this market.”
That leads to investing in more technology.
“The only way to keep winning in a competitive market is to keep innovating,” he said.
Darren Barbee can be reached at firstname.lastname@example.org.
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