ExxonMobil announces US$20bn US investment

EXXONMOBIL is investing US$20bn in 11 existing and new sites in the US Gulf East Coast over the next ten years.

The investment is part of the company’s Growing the Gulf programme, which it began in 2013, and will see the company expand or build major chemical, refining, lubricant and liquefied natural gas facilities along the Texas and Louisiana coasts, is it seeks to expand its manufacturing and export capacity. ExxonMobil chairman and CEO Darren Woods said at the CERAWeek 2017 energy conference in Houston on 6 March that the programme will create around 45,000 new jobs directly, mainly highly skilled and well paid, and many more in the local area.

“The US is a leading producer of oil and natural gas, which is incentivising US manufacturing to invest and grow. We are using new, abundant domestic energy supplies to provide products to the world at a competitive advantage resulting from lower costs and abundant raw materials. In this way, an upstream technology breakthrough has led to a downstream manufacturing renaissance,” said Woods.

The expanded capacity is expected to serve largely Asian markets, where demand for refined products is growing fastest, although some will go to other countries.

“These projects are export machines, generating products that high-growth nations need to support larger populations with higher standards of living. Those overseas markets are the motivation behind our investments. The supply is here; the demand is there. We want to keep connecting those dots,” said Woods.

Some of the sites to benefit include Beaumont, Texas, which will be expanded to include more polyethylene and ultra-low sulphur diesel production and Baytown, Texas, where there will be a new steam cracker and synthetic lubricant plants. In Baton Rouge, Louisiana, where ExxonMobil has 33 facilities, there is already a new state-of-the-art lubricants facility and a project to reduce sulphur emissions. ExxonMobil plans to build a new plastics manufacturing facility with SABIC and natural gas liquefaction and export facilities at the existing Golden Pass LNG import terminal in Sabine Pass, Texas, with Qatar Petroleum International.

US President Donald Trump immediately hailed the news as “exactly the kind of investment, economic development and job creation that will help put Americans back to work”.

Trump added: “Many of the products that will be manufactured here in the United States by American workers will be exported to other countries, improving our balance of trade. This is a true American success story. In addition, the jobs created are paying on average US$100,000 per year.”

In a statement, the White House said that the “spirit of optimism” in the US was already boosting jobs in the country. However, Christopher Rugaber, writing for the Associated Press, pointed out that the programme is simply a continuation of an investment programme begun under the previous administration.

ExxonMobil’s former CEO Rex Tillerson left the company to become Trump’s secretary of state, and the almost simultaneous publication of the two press releases and almost identical wording in parts, has led to speculation from some that ExxonMobil and the White House have collaborated a little too closely. However, some commentators, including in the UK’s Independent, have concluded that the White House press office has simply plagiarised ExxonMobil’s press release, something that has happened before.

Chevron is expected to announce major investments in the Permian basin in Texas and New Mexico later this week, again taking advantage of Trump’s support for the US oil industry.