ExxonMobil(US:XOM)2024-02-27 16:00Market Dynamics and Economic Factors - ExxonMobil's operations and earnings are significantly affected by fluctuations in oil, gas, and petrochemical prices, which are influenced by global supply and demand dynamics[14]. - Economic conditions, including recessions and changes in population growth rates, directly impact the demand for energy and petrochemicals, affecting financial results[14]. - Market factors such as interest rates, inflation, and currency exchange rates can negatively impact the company's costs and revenues[15]. - Political and regulatory developments can limit access to oil and gas resources, impacting production capabilities and investment returns[16]. Environmental and Emission Goals - The company aims to achieve net-zero emissions for Scope 1 and 2 by developing technologies such as carbon capture and storage (CCS), hydrogen, and lower-emission fuels[19]. - ExxonMobil aims to achieve Scope 1 and Scope 2 net zero emissions from operated assets by 2050, with specific targets for the Upstream Permian Basin by 2030 and Pioneer Permian assets by 2035[156]. - The Corporation aims to achieve net-zero Scope 1 and 2 greenhouse gas emissions in its operated assets by 2050, with a 20-30% reduction in corporate-wide greenhouse gas intensity by 2030 compared to 2016 levels[181]. - The Corporation's recent acquisition of Denbury Inc. expands its capabilities in carbon capture and storage, providing the largest owned and operated network of CO2 pipelines in the U.S.[181]. Operational Efficiency and Project Management - The company emphasizes operational efficiency, focusing on cost control and productivity enhancements, particularly following the acquisition of Pioneer Natural Resources Company[24]. - ExxonMobil's long-term success relies on complex, capital-intensive projects requiring high project management expertise[24]. - The success of ExxonMobil's energy transition strategy depends on timely recognition of changes in the global energy system and directing investments accordingly[19]. - Continuous improvement in hydraulic fracturing technology and greenhouse gas emissions reduction are key areas for ExxonMobil's research and development efforts[24]. Financial Performance and Investments - Total sales and other operating revenue decreased to $334,697 million in 2023 from $398,675 million in 2022, representing a decline of approximately 16.1%[134]. - Net income attributable to ExxonMobil was $36,010 million in 2023, down from $55,740 million in 2022, a decrease of about 35.5%[134]. - Earnings per common share for 2023 was $8.89, compared to $13.26 in 2022, reflecting a decline of approximately 33.8%[134]. - The company plans to continue investments in carbon capture and other technologies to reduce emissions, dependent on future market factors[155]. Production and Reserves - As of year-end 2023, ExxonMobil reported proved reserves based on the average price for the last 12 months, with no significant changes since December 31, 2023[31]. - At year-end 2023, ExxonMobil's proved reserves totaled approximately 16.9 billion oil-equivalent barrels (GOEB), with 6.3 GOEB classified as proved undeveloped, representing 37% of total proved reserves[37]. - In 2023, ExxonMobil invested $14.6 billion in the development of proved undeveloped reserves, accounting for 74% of total reported upstream capital and exploration expenditures of $19.8 billion[37]. - The largest transfers of proved undeveloped reserves to proved developed reserves occurred in the United States, Guyana, Australia, and the United Arab Emirates, with approximately 0.8 GOEB transferred during the year[37]. Shareholder Returns and Corporate Governance - ExxonMobil's share repurchase program has been expanded to up to $50 billion through 2024, including $17.5 billion planned for 2023[109]. - The corporation declared a dividend of $0.95 per common share, payable on March 11, 2024[108]. - Management concluded that internal control over financial reporting was effective as of December 31, 2023, following an evaluation based on established criteria[116]. - The company has not experienced any disagreements with accountants on accounting and financial disclosure[114]. Research and Development - Research and development costs rose to $879 million in 2023 from $824 million in 2022, an increase of approximately 6.7%[134]. - The company is investing in a new petrochemical complex in Huizhou, China, with a capacity of over 2.5 million metric tons per year, aimed at meeting domestic demand[211]. - The Strathcona Renewable Diesel project aims to produce 20 thousand barrels of renewable diesel per day, utilizing low-carbon hydrogen and locally-sourced feedstocks[203]. Global Energy Demand and Future Projections - The company projects global energy demand to rise by almost 15% from 2021 to 2050, driven primarily by developing countries[164]. - Global electricity demand is expected to increase by about 80% from 2021 to 2050, with developing countries accounting for over 75% of this increase[166]. - The share of coal-fired generation is projected to decline to approximately 15% of the world's electricity by 2050, down from about 35% in 2021[166]. - Natural gas demand is expected to rise nearly 25% from 2021 to 2050, with over 75% of that increase coming from the Asia Pacific region[168].