Exxon Mobil Corp. has successfully concluded the construction of a pilot plant in Spring, aiming to significantly reduce the cost of direct air capture (DAC) for extracting carbon dioxide from the atmosphere. During their fourth-quarter 2023 earnings call, Exxon officials expressed the ambition to cut DAC costs by half. CEO Darren Woods emphasized the importance of exploring cost-effective technologies to address emissions. Concurrently, the company plans to invest $20 billion in low-carbon technologies by 2027, with even distribution between reducing its own emissions and third-party emissions. Occidental Petroleum Corp. is also pursuing the world’s largest DAC plant, Stratos, in Texas, expected to be operational in 2025.
Exxon’s focus on lowering emissions aligns with its updated corporate plan, reflecting a $20 billion investment in low-carbon technologies, marking the third consecutive annual increase. Woods highlighted an anticipated 15% return on the low-carbon portfolio. This commitment to low-carbon initiatives contrasts with industry norms, where traditional oil and gas projects often generate higher returns. A Deloitte survey revealed that 60% of executives consider investments in low-carbon projects only if the internal rate of return surpasses 12% to 15%.
In terms of financial performance, Exxon reported Q4 revenue of $84.3 billion, down 11.6% from the previous year, contributing to a full-year revenue decline of 16.7%. Adjusted earnings for Q4 reached $10 billion, a 29% decrease compared to the same period in 2022, with exclusions related to a $2 billion writedown associated with regulatory challenges in its Santa Ynez field in California. Exxon faced setbacks due to a pipeline leak in 2015, leading to production suspension and regulatory challenges. The company generated $4.1 billion from non-core asset divestments, including the undisclosed sale of XTO Energy’s assets in East Texas to Hilcorp Energy Co.