Exxon isn’t alone in facing serious challenges even as commodities are on a tear. Chevron disappointed investors at the end of last weak with a surprise loss grounded on weaker-than-expected refining margins. Earlier Tuesday, BP Plc squeezed out a small profit that was a fraction of what the explorer earned in pre-pandemic days. ConocoPhillips posted a third consecutive loss.
As he begins his fifth year as CEO, Woods is taking an axe to capital spending and operating costs, all but abandoning his circa 2018 blueprint for expanding output while drilling and construction costs were low. Exxon announced 14,000 job cuts, delayed megaprojects from the Permian Basin to Mozambique, and has pledged to keep a tight rein on spending through the middle of this decade.
The cutbacks helped turn Wall Street analysts more positive on the stock, especially with oil prices rebounding this year, but investors are still nursing deep losses after a 41% plunge in 2020 and years of underperformance compared with peers.
Exxon announced plans on Monday to set up a new business called ExxonMobil Low Carbon Solutions that will spend $3 billion on low-emission technologies through 2025. The slate of projects included several previously announced initiatives.
Last week, activist investor Engine No. 1 formally took up the cause for a change in strategy, nominating four directors to the board ahead of Exxon’s annual meeting in May. The investor, which has the support of the California State Teachers’ Retirement System, is calling on Exxon to invest more in clean energy, commit to reducing emissions and improve returns on capital.
Meanwhile, the company is in talks with investor D.E. Shaw & Co. that may lead to additional director nominations in the weeks ahead, according to people familiar with the matter. On Tuesday, Exxon appointed former Petronas CEO Tan Sri Wan Zulkiflee Wan Ariffin to its board and said it’s talking to other director candidates.
—With assistance from Laura Hurst and Scott Deveau.
This article was provided by Bloomberg News.