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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 company’s
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. |
