Exxon Mobil has committed $15bn for lower-emission investments across its operations over the next six years — equivalent to about $2.5bn per year — according to updated corporate plans released on December 1.

The company said the planned capital expenditure (capex) will be balanced across projects to reduce greenhouse gas (GHG) emissions from existing operations and increased investment into its low-carbon solutions business. It aims to reduce company-wide GHG emissions by 20% to 30% by 2030.

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“Our strategy is designed to create shareholder value by leveraging our competitive advantages while maintaining flexibility to respond to future policy changes and technology advances associated with the energy transition,” said Darren Woods, Exxon’s chairman and CEO.

These updated emissions and capex plans are the first since Exxon lost board seats in a proxy battle in May with Engine No. 1. The activist hedge fund had said the US oil supermajor’s focus on fossil fuels had put it at “existential risk” as the world transitions to a lower-carbon future.

Exxon said it intends to build on its capabilities and experience in fossil fuels and chemicals to drive growth opportunities for carbon capture and storage, biofuels and hydrogen.

“We anticipate meeting our 2025 GHG emission-reduction plans ahead of schedule, which gives us confidence to set more aggressive medium-term goals across all of our businesses,” said Mr Woods.

By the end of 2021, the company anticipates it will have reduced GHG emissions from its upstream operations by 15–20% compared with 2016 levels. This has been supported by an expected reduction on methane emissions by 40–50% and gas flaring by 35–45% over the same period.

Small reduction share

Despite this new focus on greener energy, emission-reduction efforts account for only about a tenth of Exxon’s total planned capex of between $20bn and $25bn per year through 2027. These total figures are up from about $16bn in Exxon’s pandemic-hit budget in 2021, but still between 17% and 33% lower than its pre-pandemic plans.

Exxon said that projected growth in its upstream business will come from “aggressive cost reductions and progressing advantaged investments” in its low-cost-of-supply projects in Guyana, Brazil and the US Permian Basin.

Since 2003, Exxon has announced foreign investment projects worth $104.5bn, making it the world’s second-most active fossil fuel investor, behind Royal Dutch Shell, according to greenfield investment monitor fDi Markets.

While Exxon cut back massively on international expansion plans in 2020 due to the pandemic, in September 2021 it announced its most capital-intensive project for almost a decade.

Exxon plans to invest $5bn to increase oil production on Sakhalin Island, Russia by 2026, as part of a joint venture with several partners including Japan’s Sodeco, Russia’s Rosneft and India’s ONGC. The project will serve markets in the Asia-Pacific region including Japan, South Korea, Taiwan, China, Malaysia, the Philippines and Singapore.