ExxonMobil to Invest in its Refineries to Boost Margins: CEO
ExxonMobil will focus on investing in projects at its existing facilities including the Baton Rouge, La., and Beaumont, Texas, refineries to improve the production yields and increase refined product margins, Chief Executive Darren Woods said Friday.
In the company’s third-quarter earnings call with analysts, Woods said that the oil major has been investing “selectively” in its large refineries which have portfolios of high-value production like lubricants, chemicals and petroleum products.
While ExxonMobil has homed in on upgrading its product slate and improving the yield for its traditional petroleum products, the company is looking more broadly at other hydrocarbons like Proxxima — its polyolefin thermoset resin used in composite and coatings — and carbon materials.
“We will continue to look for ways that we can leverage existing facilities to continue to make products that have high margins, high value in the short term,” Woods said.
Investing in existing refineries allows ExxonMobil to increase production capacity at roughly half the cost compared with building a brand-new facility, he said.
“So today, we’re investing in Baytown. Our plans include investments in Baton Rouge and Beaumont, and that will significantly improve our production of diesel, chemical feedstocks, and lubricants,” Woods said.
The oil major has increased its crude processing capacity by nearly 10% since 2019, and its 637,400 b/d Beaumont, Texas, refinery boosted its distillate production by about 40% following the completion of a $2 billion expansion project in early 2023. In addition, the company has a current project to increase distillate and lubricant production in its 588,000 b/d Baytown, Texas, refinery.
Looking forward, ExxonMobil expects its investments across its U.S. facilities will increase distillate production by another 100,000 b/d, said Woods, without providing a specific time period.
In its upstream segment, the major expects full-year production in the Permian Basin in West Texas of around 1.8 million oil-equivalent b/d. In late Q4, the company will start up its fifth floating production, storage, and offloading vessel in Guyana that is key to increasing output.
ExxonMobil also expects Q4 Middle East production impacts in line with Q3, or around 350,000 of oil-equivalent b/d being offline, assuming continuation of the current level of supply disruptions.
–Reporting by Frank Tang, frank.tang@dowjones.com; Editing by Michael Kelly, mkelly@opisnet.com
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