On the virtual stage of the Engineering and Construction Contracting Association’s annual conference Oct. 1, ENR interviewed Neil Duffin, president of ExxonMobil Global Projects Co. Duffin said the energy business has been “shaken more than it has ever been shaken before.” For example, ExxonMobil itself announced in April a 30% cut in capital investments for 2020 due to decreased oil demand, moving from $33 billion to $23 billion in projects.
ENR: It’s been a “what can happen next” kind of year. What were the biggest challenges?
Duffin: We call these unprecedented times—whether it be the pandemic and the impact that had on the marketplace [or] the fact that we had the debate going on between Russia and Saudi Arabia, the flooding of the market and the drop in price, and the drop in margins in the fuels, lubes and chemical business. The challenge … was that all aspects of the business took a bit of a beating, whether it be the upstream crude and gas prices or the margins in fuels, lubes and chemicals. The cash flow wasn’t there to reinvest into the business that we had planned as we moved into 2020.
ENR: Has it presented opportunities?
Duffin: This has had an impact across all sectors—national oil companies, [independent oil companies] and engineering contractors. It’s an opportunity for us to get together, understand risk and look forward. We’re going to come out of this stronger and more resilient so we can compete in a cyclical environment that is not as it has been in the past.
ENR: Are you changing the way you are doing business?
Duffin: Much better collaboration up front, much better understanding of the risk, and out of that will come the better contracting strategies.
ENR: Specific project examples?
Duffin: On some projects we’ve taken a pause—but not all. Some continue to move forward like the Gulf Coast Growth Ventures project with our partner SABIC [a 1.8-million-tonne ethane cracker in Texas]. But on some refinery projects, we’ve decided to take an 18-month pause. We’re still completing the civil works, and we’re going to ramp them down safely. Quite honestly, we’ve seen an increase in productivity because we’ve taken the heat out of it.
ENR: This has also been a year of social pressures, among them the movement for racial justice. Do you see a drive toward diversity?
Duffin: There’s no doubt about it. I put that as part of the core values—bringing people from all backgrounds into our organization so we can capture different thought processes. Recent events around the globe bring that to bear.
ENR: When might the market turn around?
Duffin: We need to take this time to get ourselves more efficient. We will come out of this, but our program is deliberately slim again next year. The fundamentals are telling us that 2022 plus is when the industry will see a bigger pickup.