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ExxonMobil to write off as much as USD20bn in assets; cuts capex

December 02/2020

MOSCOW (MRC) -- ExxonMobil plans to write down as much as USD20bn in assets and cut its 2021 capital expenditures (capex) to USD16bn-19bn as it prioritizes investments in chemical performance products in the near term, said Chemweek.

Annual capex thereafter until 2025 will be USD20bn-25bn, down from the companys original budget of USD30bn-35bn. ExxonMobil is also eyeing a 15% cut in its global workforce by the end of next year to cut expenses amid the demand slump caused by the coronavirus pandemic and a low-oil price environment. The asset write-off would include certain dry gas resources in the Appalachian and Rocky Mountains, Oklahoma, Texas, Louisiana and Arkansas in the US, and in western Canada and Argentina.

"Continued emphasis on high-grading the asset base - through exploration, divestment and prioritization of advantaged development opportunities - will improve earnings power and cash generation, and rebuild balance sheet capacity to manage future commodity price cycles while working to maintain a reliable dividend," ExxonMobil chairman and CEO Darren Woods said. ExxonMobil's spending will now focus on "developments in Guyana and the US Permian Basin, targeted exploration in Brazil and Chemicals projects to grow high-value performance products", the company said.

Woods said the business environment in the fourth quarter is showing signs of improvement despite the resurgence in coronavirus cases and accompanying economic restrictions. Prices and margins for many of our businesses have improved from the third quarter and when coupled with continuing efforts to reduce spending and capture additional efficiencies, quarter-to-date cash flow has improved versus our plan assumptions, he said.

As MRC informed earlier, ExxonMobil-operated, 110,000-metric tons/year butyl rubber plant at Fawley in the south of the UK is set for a full-scale turnaround in 2022, according to sources with links to the plant. The unit is one of the largest producers in the world of halobutyl rubber, supplying one third of all ExxonMobil's global output.

We remind that ExxonMobil has undertaken a planned shutdown at its cracker in Singapore. The company halted operations at the cracker for maintenance on September 14, 2020. The cracker is expected to remain off-line till end-October, 2020. Located at Jurong Island, Singapore, the cracker has an ethylene production capacity of 1 million mt/year and a propylene production capacity of 450,000 mt/year.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,496,500 tonnes in the first eight months of 2020, up by 5% year on year. Shipments of all ethylene polymers increased, except for linear low desnity polyethylene (LLDPE). At the same time, PP shipments to the Russian market reached 767,2900 tonnes in the eight months of 2020 (calculated using the formula - production minus exports plus imports - and not counting producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world"s oil and about 2% of the world"s energy.
Author:Anna Larionova
Tags:petroleum products, crude oil, petrochemistry, Crude oil, Exxon Mobil.
Category:General News
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