ExxonMobil believes that the world will need much more energy in the future

ExxonMobil (XOM 0.81%) he is a firm believer that oil will remain vital to fuel the economy for decades to come. This vision drives him to continue investing in oil projects. However, the the company’s focus is on the bigger picture of energy, which is much bigger than oil. It aims to participate in the global increase in energy demand, regardless of which direction the world is heading.

Here’s a closer look at from ExxonMobil the long-term outlook for the energy market and how this informs its investment strategy.

Built for the future

Exxon CEO Darren Woods discussed the company’s energy outlook on her recent second quarter conference call. He pointed out that the report “projects global energy demand to be 15% higher in 2050 than it is today. We see oil demand holding steady at around 100 million barrels per day in 2050, while demand for renewables and natural gas is growing considerably.” He noted that the growing demand for energy “creates opportunity for ExxonMobil, regardless of the speed or direction of the energy transition.”

Woods also mentioned:

Over time, as it becomes increasingly apparent that heavy industry and commercial transport will not be significantly powered by renewables, the world will come to rely more on technologies where we have an advantage, including hydrogenbiofuels and carbon capture and storage.

That’s why The company’s current focus in the low-carbon energy transition is to leverage its expertise in molecules. Exxon knows how to extract, process, transport, refine, upgrade and sell hydrocarbon molecules. The company believes the market for low-carbon energy molecules will reach $6 trillion by 2050. This is a massive opportunity for the company.

It is working to build more molecule-based businesses to leverage its hydrocarbon expertise and complement its upstream production and downstream products operations. This strategy will allow it to remain flexible and capitalize on future opportunities, while continuing to deliver profitable growth regardless of the energy path the economy takes. in the end choose.

Investing broadly in the future of energy

Exxon’s expansive investment approach has been on full display this year. The company continues to invest heavily in increasing oil and gas production. It recently completed the acquisition of Pioneer Natural Resources. The deal significantly improved its position in the oil-rich Permian Basin, where Exxon posted record production in the second quarter.

The company also continues to invest in its world-class position offshore Guyana, where it has set a production record during this period. The company recently applied to develop its seventh project in the region. The Hammerhead project would produce 120,000 to 180,000 barrels per day starting in 2029.

At the same time, ExxonMobil is investing heavily in low-carbon energy. For example, work to build the world’s largest low-carbon hydrogen production facility. The project would produce 1 billion cubic meters of clean hydrogen per day and 1 million metric tons of ammonia per year. It would supply low-carbon hydrogen to US Gulf Coast markets to help industrial customers decarbonize their operations.

Meanwhile, the company recently signed another carbon sequestration deal with the fertilizer and ammonia producer CF Industries. Through the deal, Exxon would remove up to 500,000 metric tons of carbon dioxide annually from a site in Mississippi, cutting emissions in half. Exxon has now signed up customers to remove 5.5 million tons of carbon dioxide annually. This is equal to replacing 2 million petrol cars with electric vehicles (EVs). Using carbon capture technology allows companies to continue consuming oil and gas while also reducing their carbon footprint.

Exxon is also leveraging its drilling experience to produce lithium for electric vehicles. The company controls land in Arkansas that holds lithium-rich saltwater brine. It plans to become a major lithium producer in the coming years. Exxon recently agreed to supply leading electric vehicle maker SK On with up to 100,000 metric tons of lithium from its first project in Arkansas.

Invest to capitalize on growing energy demand

ExxonMobil knows that the world will need much more energy in the future, including oil and low-carbon energy. That view is driving Exxon to continue investing in oil projects while building more low-carbon energy businesses. The company’s broad strategy positions it to continue growing its profits regardless of which energy source becomes dominant in the future.