The Strategist

ExxonMobil writes off $17-20B in assets

12/02/2020 - 02:49

ExxonMobil has published its strategic development plan for the coming years. It envisages further cost reduction while gradually increasing investments in new promising projects.

Mike Mozart
Mike Mozart
In order to achieve this goal, the company intends to abandon those projects which, in its opinion, are not able to bring substantial profits.

The list of projects includes development of dry gas fields in the Rocky and Appalachian Mountains, Texas, Oklahoma, Louisiana and Arkansas in the United States as well as in western Canada and Argentina. 

Their cancellation will result in a write-off of $17-20 billion, which will be recorded in the company's fourth quarter 2020 financial statements.

The company intends to spend between $16 billion and $19 billion on more significant projects in 2021, and to keep this figure between $20 billion and $25 billion in future years.

In terms of cost reductions, the company intends to continue with the restructuring of its business, which will include the previously announced 15% reduction in global workforce by the end of 2021.

The U.S. company incurred a loss of $680 million in the third quarter as a result of the COVID-19 pandemic which severely impacted the oil and gas market worldwide. 

By comparison, the company completed the quarter a year earlier with a net profit of $3.2 billion.