ExxonMobil plans to add $10bn to its annual downstream earnings by 2027, increasing petrochemical integration at its refining complexes while eyeing renewable fuels co-processing and divestment of existing facilities.
The company has undertaken multiple large scale projects in recent years — such as the 250,000 b/d expansion of its 370,000 b/d Beaumont, Texas, refinery — to integrate and enhance refining assets in what it now calls its Product Solutions division.
The plan to boost earnings has also involved cost cutting. ExxonMobil is on track to reduce downstream costs by $500mn by 2025, the company's president of product solutions Karen McKee said in a presentation to analysts last week.
"We're also high-grading our portfolio through selective divestments and terminal conversions of non-core, less competitive assets," senior vice president of energy products Neil Hansen said during the event. "We expect our footprint to be 13 operated refineries by the end of this year, including recently completed or announced investments."
The company operated or had economic interests in 19 refineries at the end of 2022, five of which were in the US before they sold the 62,000 b/d Billings, Montana, refinery to Par Pacific this year.
"A site is typically very strategic to us if we have a significant scaled presence of fuels, lubes, and chemicals," Hansen said. While integrated facilities are important, ExxonMobil also sees an advantage in sites that can access discounted crudes, such as the 252,000 b/d Joliet refinery in Channahon, Indiana. Hansen declined to comment on how many more ExxonMobil plants could be divested.
"I would say that we're very close to our desired state," McKee added.
In the US, there are no obvious candidates following the Billings sale. The company recently invested $2bn to expand the Beaumont refinery and a further $2bn for new chemical production units at its Baytown, Texas, site which processes 564,000 b/d of crude.
The company's 523,000 Baton Rouge, Louisiana, refinery has undergone multiple refined product and petrochemical production projects since 2021.
Of ExxonMobil's 5mn b/d of global refining capacity, 85pc is integrated with petrochemicals. Operating fewer, more complex refineries was reiterated on the last week's call as the company's preferred downstream structure.
Early steps in renewables
ExxonMobil is looking to grow its renewable fuels production but says where it invests will be driven by accommodative government policy.
ExxonMobil is eyeing conversions of existing hydro-treating capacity to use vegetable or waste oils to produce renewable diesel and sustainable aviation fuel, saying that they prefer reconfigurations to greenfield projects in last week's event. "We're pursuing 12 projects globally including co-processing, bio-blending and asset reconfigurations," Hansen said.
Where ExxonMobil is investing in renewables is driven by government policy. The company cited Canada and France as examples of what it believes are countries with supportive policy frameworks.
"Although the [US Inflation Reduction Act] has many good parts of the policy, it does preclude co-processing at existing sites," senior vice president Jack Williams said at last weeks event.
Analyst at Mizuho noted in a 22 September research report that more reconfigurations, particularly in Europe and Canada, are likely given ExxonMobil's assets in those regions are smaller and less integrated.
Still, US independent refiners such as Valero, Marathon and Phillips 66 have completed or are in the process of building renewable diesel and sustainable aviation fuel facilities co-located at existing domestic refineries. Oil major and industry peer Chevron began co-processing renewable feedstock in 2021 and expects 10,000 b/d of renewable diesel production from the unit by the end of 2023.
