Houston — Exxon Mobil Corp’s Low Carbon business has the potential to generate hundreds of billions of dollars in revenue and outperform the company’s traditional oil and gas as soon as a decade from now, CEO Darren Woods said.
The largest U.S. oil producer on Tuesday laid out to investors the aims of its emerging energy transition strategy in a meeting with Wall Street. Exxon is tackling what should be a multi-trillion market in 10 years or more, Woods said.
“This business is going to look quite a bit different than the base business of Exxon Mobil,” vowed Dan Ammann, president of Exxon’s two-year-old Low Carbon Business Solutions unit. “It is going to have a much more stable, or less cyclical, profile.”
Ammann declined to comment on whether expectations for rising oil prices underpin the strategy.
The company on Tuesday put out parameters for how it sees that growth unfolding, with carbon priced as much as three times current levels.
Exxon is one of the most oil- and gas-focused companies among Western oil producers, a strategy that delivered record profits for its investors last year as fossil fuel prices soared.
Unlike its peers, Exxon has stayed away from renewable energy like solar and wind. Its energy transition plans lean heavily on reducing carbon emissions from its own operations, which Exxon is spending $10 billion by 2027 to implement.
The company on Tuesday disclosed that it signed a long-term agreement with Linde Plc, adding a new client to its portfolio of companies willing to pay to decarbonize their operations.
It expects to sign contracts that should generate multi-billion dollars in revenue annually in the next five years, under current conditions. The business can achieve “robust double-digit returns” off these long-term contracts, Ammann said.
In five years or more, depending on carbon pricing and regulatory conditions, the market could be worth tens of billions of dollars in annual revenues, the company said in a presentation.
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