Exxon Mobil Corp. plans to invest $50 billion over five years to expand its U.S. oil-and-gas production facilities, the company said on Feb. 2, when it released its 2017 results, which included $8.4 billion in fourth-quarter earnings and $19 billion in income for the year. Chairman and CEO Darren Woods credited the effect of U.S. tax reform on its earnings, based on revalued deferred income-tax liabilities, for the size of the investment and for boosting the company’s commitment to grow its U.S. business. He said Exxon Mobil gained $5.9 billion in fourth-quarter earnings due to the tax changes.
The $50 billion is a “projection,” noted Jeff Woodbury, vice president of investor relations, in an earnings call with analysts. “We clearly believe that the reform will make the investment climate more attractive,” he said. The projected investment will be split, with two-thirds earmarked for its upstream business and the remainder for its downstream and chemical businesses. Further, about $2 billion will be used to build new manufacturing facilities, improve infrastructure and increase production in the Permian basin in West Texas and New Mexico. The funds will be spent on transportation infrastructure to support tripling daily production in the region to more than 600,000 barrels a day by 2025. “Tight oil production from the Delaware and Midland basins will increase five-fold in the same period,” the company said of the West Texas basins.
Exxon Mobil plans to expand the crude-oil terminal in Wink, Texas, and add infrastructure upgrades that will move production to operations along the Gulf Coast. “Those investments, expected to exceed $2 billion, will support short-term construction jobs and long-term positions,” the company said.
Previously announced plans to build and expand manufacturing in Texas include a new ethane steam cracker at the Baytown plant and two new high-performance polyethylene units at the Mount Belvieu plant. At the Beaumont plant, a new production unit will be added to increase capacity by 65%. Last month, the company said it would invest $20 billion at 11 new and existing sites during the next 10 years to expand its Gulf Coast manufacturing and export capacity. Investment began in 2013, but the locations of the 11 sites were not made public.