Page 8 - NorthAmOil Week 09 2021

NorthAmOil INVESTMENT NorthAmOil

ExxonMobil to focus on “advantaged”

projects, shareholder value

AMERICAS SUPER-MAJOR ExxonMobil has outlined barrels of oil equivalent per day. A year ago, Exx-
its priorities between now and 2025 – boost- onMobil was targeting output of 5mn boepd
ing cash flow and earnings, increasing its divi- by 2025, with growth also centred on Guyana
dend, reducing debt and funding “advantaged” and the Permian Basin. However, the corona-
projects. The company also said it would keep virus (COVID-19) pandemic has forced the
working to commercialise lower-emission tech- super-major to re-evaluate its plans.
nologies in line with the goals set out by the Paris ExxonMobil has also reduced its capital
climate agreement. expenditure guidance for 2021-25 by around
In materials released for its 2021 investor day, $40bn, with Permian capex scaled back by over
ExxonMobil said it would target returns of at 40%. Its Guyana and Brazil investment plans are
ExxonMobil has scaled least 30% on the handful of new projects it will unchanged, however.
back its Permian Basin opt to proceed with over the coming years. This comes as something of a blow to Per-
capital budget by over “And 90% of our upstream investments in mian ambitions, with ExxonMobil and rival
40%. resource additions, including in Guyana, Bra- super-major Chevron expected to drive activ-
zil and the US Permian Basin, generate a 10% ity in the basin over the coming years. Indeed,
return at $35 per barrel or less,” stated Exxon- speaking at the CERAWeek by IHS Markit
Mobil’s chairman and CEO, Darren Woods. virtual conference this week, Pioneer Natural
“Downstream investments improve net cash Resources’ CEO, Scott Sheffield, said the Permi-
margin by 30% and our chemical investments an’s performance over the coming years would
grow high-value performance products by largely depend on how the leading producers
60%.” in the basin – and particularly ExxonMobil and
The company has scaled back its production Chevron – pace their activity.
outlook for the 2021-25 period, saying output Judging by ExxonMobil’s plans, it could be
would be flat compared with 2020 levels at 3.7m worth reining in expectations for the Permian.™
PERFORMANCE

CNRL reports Keystone XL charge in earnings

CANADA CANADIAN Natural Resources Ltd (CNRL) annual corporate boe [barrels of oil equivalent]
posted a net profit of CAD749mn ($592mn) production of 1.16mn boe per day, or an approx-
for the fourth quarter of 2020. This marked imately 65,000 boepd increase over 2019 levels,”
an increase from both the third quarter of last McKay said.
year and the fourth quarter of 2019, for which CNRL’s production of synthetic crude from
the company achieved profits of CAD408mn its oil sands mining and upgrading operations
($322mn) and $597mn ($472mn) respectively. reached a record 490,800 barrels per day (bpd)
However, CNRL reported a CAD143mn in December owing to high utilisation rates and
Strong oil sands ($113mn) charge related to the Keystone XL ongoing incremental output growth projects. At
mining production pipeline, which was effectively killed off in Janu- the same time, operating costs fell by CAD2.10
and operating cost ary, when new US President Joe Biden cancelled ($1.65) to CAD20.46 ($16.16) per barrel of syn-
cuts bolstered CNRL’s the cross-border permit for the project. thetic crude in 2020, according to McKay.
performance. Had it not been for Keystone XL, analysts said CNRL’s charge related to Keystone XL fol-
the company would have beaten expectations, lows similar charges reported by Cenovus
with its performance bolstered by strong oil sands Energy and Suncor Energy in their fourth-quar-
mining production and operating cost cuts. ter releases earlier. Cenovus’ charge amounted
“In 2020, we were nimble, quickly lowering to CAD100mn ($79mn), while Suncor saw a
our capital,” said CNRL’s president, Tim McKay, CAD142mn ($112mn) charge.
on the company’s earnings call. CNRL cut its However, McKay said he was confident that
2020 budget to CAD2.68bn ($2.12bn) in May export capacity from the oil sands would con-
2020 from CAD4.05bn ($3.20bn) in response to tinue to grow with Enbridge’s Line 3 replacement
the collapse in crude prices as the coronavirus pipeline project starting up late this year and the
(COVID-19) pandemic hit demand and exacer- Trans Mountain pipeline expansion set to be in
bated oversupply. service by the end of 2022.
“With our long-life, low-decline and CNRL has 94,000 bpd of committed capacity
high-quality asset base, we still achieved record on Trans Mountain expansion.™

P8 www. NEWSBASE .com Week 09 04•March•2021