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Behind ExxonMobil's Integrated Value Chain: XOM in 3Q17

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Part 13
Behind ExxonMobil's Integrated Value Chain: XOM in 3Q17 PART 13 OF 17

What ExxonMobil’s Capex Tells Us about Its Growth Trajectory

ExxonMobil’s capex

ExxonMobil (XOM) plans to concentrate on an integrated earnings model to capture value at every stage of the energy stream. In 2Q17, XOM incurred $3.9 billion in capital expenditure or capex, of which 71% was in the upstream segment.

XOM has projected its 2017 investment level to be around $22 billion. In 1H17, XOM incurred $8.0 billion in capex, compared with Chevron (CVX), Royal Dutch Shell (RDS.A), and BP (BP), which incurred capex of $8.9 billion, $9.9 billion, and $7.9 billion, respectively, in the first half.

What ExxonMobil&#8217;s Capex Tells Us about Its Growth Trajectory

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XOM’s expanding upstream portfolio

ExxonMobil expects five of its major upstream projects to start production in 2017 and 2018. These projects are expected to add 0.34 million boepd (barrels of oil equivalent per day) of working interest capacity. These projects are Kaombo in Angola, Hebron in Canada, Upper Zakum in the United Arab Emirates, Odoptu 2 in Russia, and Barzan in Qatar. Odoptu 2 and Hebron will likely start production in 4Q17.

The company is also expected to incur capex on other long-term projects like Tengiz in Kazakhstan and Liza in Guyana. In fact, the Stabroek block, offshore Guyana, contains promising fields like Liza Deep, Snoek, and Payara. Liza Phase 1 is expected to begin production in 2020. Plus, the company also signed an agreement to buy 25% stake from ENI (E) in the Area 4 block, offshore Mozambique, which has 85 trillion cubic feet of gas in place.

ExxonMobil is also expanding its Permian basin activities. The company has 16 rigs operating in the region, producing more than 165 thousand barrels of oil equivalent per day, and recently, ExxonMobil captured new offshore blocks in Australia, Equatorial Guinea, and Suriname.

Overall, ExxonMobil has a portfolio of around 100 projects at various stages of development, all of which are likely to yield result sooner or later. In the next part, we’ll discuss XOM’s downstream projects.

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