Exxon Mobil Corp. is set to invest $50 billion over the next half decade in a return to the oil giant’s spending habits before crude suffered its worst price rout in a generation.
With oil prices now hovering above $65 a barrel in New York, Exxon Chief Executive Officer Darren Woods disclosed a program that includes the Permian Basin of West Texas and New Mexico, a hotbed of U.S. shale drilling where Exxon has been aggressively expanding for years.
In a blog post, Woods, a second-year CEO at the world’s biggest oil explorer by market value, cited President Donald Trump’s U.S. tax overhaul as a significant enabler of the plan. But it basically just returns the investment program to 2012-2016 levels, when crude prices peaked.
Exxon’s capital budget for American projects averaged $10.5 billion a year during that period, an average that fell when 2016 spending plunged to less than $6 billion, the data showed. During the first nine months of 2017, the Texas-based company spent $4.3 billion in the U.S.; the full-year figure won’t be available until Exxon discloses 2017 results on Feb. 2.
The news of the $50 billion program was originally broken in a tweet by U.S. Representative Kevin Brady, the Texas Republican whose district is home to Exxon’s largest corporate campus. More than $35 billion of that amount is for projects not previously announced, according to company spokesman Scott Silvestri.
Woods’ blog post was short on specifics. Other than referencing the Permian region, he wrote that the spending will “expand existing operations, improve infrastructure and build new manufacturing sites. This will create thousands of jobs, strengthen the U.S. economy and enhance energy security.”
The queue of projects will be in addition to $20 billion in investments that Exxon announced last year, Woods said. To be sure, the company was roundly criticized after last year’s announcement when it became clear the figure included projects that dated as far back as 2013.