ExxonMobil bets on a future imbalance of supply and demand caused by underinvestment in oil and gas energy development. Therefore, ExxonMobil is positioning itself to take on the role of providing for the future hydrocarbon demand in contrast to European counterparts who clearly state their goals in pivoting towards low-carbon cleaner energy.
As of now, the company is focused on the short to medium-term outlook with no indication of shifting away from oil and gas. However, ExxonMobil could potentially outperform other peers if the company is able to optimise its assets, preparing to capture a bigger market share once oil demand recovers closer to pre-pandemic levels by 2022 as forecast by the IEA. ExxonMobil could also sustain and profit marginally at a lower price environment, considering its aggressive measure to reduce operating costs by approximately 20% from 2019.
Due to the Covid-19 pandemic, ExxonMobil reduced 2021 capital guidance by 30% compared to 2020 down to approximately $16m-$19m. However, the company retains its priority to invest in a high-value project in Guyana and Brazil while pacing the development of Permian Basin and liquefied natural gas (LNG) in Mozambique. ExxonMobil had significant growth in Permian production through 2020 but decided to slow down the development and maintain 10 – 15 rig count by the end of 2020 and throughout 2021 in order to retain the long-term value of Permian Basin.