The Strategist

ExxonMobil to invest $ 20 billion in the Gulf of Mexico

03/07/2017 - 12:45

By 2022, US ExxonMobil plans to invest $ 20 billion in projects for processing hydrocarbons and petrochemicals on the Gulf of Mexico coast in the US, the company said, citing statement of its Head Darren Woods.

Brian Katt
Brian Katt
Investments made in 2013-2022 within 11 existing and planned projects will create more than 45,000 jobs, he said. In particular, Woods meant projects for oil and gas processing, as well as petrochemical production in the states of Texas and Louisiana. The company was focused on Asian and other markets when planning investments in chemical production on the Gulf of Mexico coast, the statement said.

Immediately, US President Donald Trump commented the project enthusiastically. Recall that he appointed Rex Tillerson, Mr. Woods' predecessor as head of ExxonMobil, as US Secretary of State.

Calling the plan "a true American success story", President of the United States boasted that most of those who take up permanent jobs will receive at least $ 100,000 a year. 

According to the American Chemical Society, chemical production accounted for 14% of US exports in 2015. By 2030 export of oil and gas products will amount to $ 123 billion.

Earlier, Exxon Mobil reported that it plans to increase capital costs by 16%, to $ 22 billion in 2017, and intends to spend about $ 25 billion annually before the decade ends. More than a quarter of investments in 2017 will be directed to projects with a payback period of less than three years, including in shale basins Permian and Bakken in the United States. At the same time, the company's production of shale oil in the Permian and Bakken basins will be growing by 20% annually until 2025.

The program will create 45 thousand jobs - 12 thousand permanent in the fuel and energy sector and 35 thousand temporary (mainly in construction), said Head of ExxonMobil Darren Woods at energy conference CERAWeek in Houston.

President of the United States Donald Trump described these plans in the most laudatory expressions both in his Twitter and in an official statement published by the White House later.

However, US political and business publications draw attention to the fact that a significant amount of this investment has already been announced earlier. Some of the 11 announced projects were discussed as far back as 2013, before the large-scale collapse of oil prices, and their implementation was planned at least until the end of 2022.

It is not the first time when American corporations helped Donald Trump to influence public opinion, making up an impression of creating tens of thousands of jobs thanks to activities of the new US president, the Associated Press reports.

At ExxonMobil, Woods replaced Rex Tillerson, who received the post of Secretary of State in Trump’s administration. Most of the decisions on the announced projects made even under Tillerson’s management, noted industry publications.

Production volumes in the US have been growing for 7 consecutive months. During this time, US oil companies increased production by 0.6 million barrels per day. The total figure is 9.02 million barrels per day, which is a record high for more than a year.

According to official forecast of the Ministry of Energy, production will grow to 9.18 million barrels per day before the end of the year, and will reach 9.68 million barrels in the next year.

At the same time, demand for oil within the US is stagnating and next year is not expected to end with growth. That is why the US is increasing oil exports, which in late February reached a historic record of 1.2 million barrels per day.