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Exxon plans major US investments due to tax reform
Exxon Mobil Corp (XOM.N) plans to invest billions of dollars in the United States due in part to recently approved corporate tax rate cuts, the company’s chief executive said on Monday.
Darren Woods, head of the world’s largest publicly traded oil producer, said in a blog post on the company’s website that Exxon expects to spend $50 billion in U.S. projects over the next five years. The company also is “actively evaluating” projects now in planning stages as a result of new tax and regulatory changes, he wrote. (exxonmobil.co/2DZKArF)
More than $35 billion of that amount is for projects not previously announced, according to company spokesman Scott Silvestri.
Exxon previously pledged tens of billions of dollars for U.S. refining, petrochemical and shale exploration efforts. Last spring, it laid out a $20 billion investment in its U.S. Gulf Coast chemical and oil refining operations through 2022.
The company also is increasing investment in its West Texas and New Mexico shale operations, and moving ahead on a $10 billion petrochemical complex with Saudi Basic Industries Corp in Texas.
U.S. President Donald Trump signed into law a tax reform package last month that cut top corporate income rates to 21 percent from 35 percent and allowed for immediate expensing for capital costs of projects.
“The recent changes to the U.S. corporate tax rate coupled with smarter regulation create an environment for future capital investments,” Woods said, adding Exxon is reviewing “the impact of the lower tax rate on the economics of several other projects currently in the planning stages.”
Woods took over the top job in January 2017 after former chief Rex Tillerson resigned to become U.S. secretary of state.
Exxon is slated to report its quarterly results on Friday.
Shares of Exxon fell 1 percent to close Monday at $88.09 as oil prices CLc1 also fell.
One Comment on "Exxon plans major US investments due to tax reform"
Davy on Tue, 30th Jan 2018 5:38 am
“Is Texas Set For Another Oil Boom?”
https://tinyurl.com/yddmogn8
“Texas is set for another oil boom, with production this year expected to hit a record high. That’s according to Karr Ingham, the oil economist who created the Texas Petro Index — a composite based on several upstream indicators. The December 2017 reading of the index was 188.8, up from 151.2 in December 2016. This is still far below the peak of 314.2, which was reached in November 2014, a few months after the price slide began, but it’s much better than 2016 readings. In fact, the TPI has been rising for 13 months in a row. Now, that’s obviously thanks to higher prices and more efficient production, and Ingham noted both, adding, however, that oil price predictions are “all over the map”. Still, he forecast that oil production in both Texas and the United States as a whole will break the previous records. For the Lone Star State, Ingham predicted total production of 1.423 billion barrels this year, or around 3.9 million bpd, beating its previous record of 1.263 billion barrels (3.46 million bpd), set in 1972. If prices stay above $60 a barrel, this would spur a strong rebound in oil and gas drilling in Texas and in the other southern states, as forecast by the Dallas Fed in a survey among oil executives conducted at the end of last year. At the time of the survey, WTI traded below the $60 threshold, but yesterday it hit $66.66, so there’s a very good chance that it will remain above $60 for a while, unless something unforeseeable happens. The Energy Information Administration’s (EIA) latest weekly petroleum status report pegged daily production at 9.88 million bpd, of which 9.37 million bpd was from the Lower 48. The authority’s drilling productivity report said that in January the average daily production in Texas’s two largest shale plays, the Eagle Ford and the Permian stood at 1.242 million bpd and 2.794 million bpd, respectively. These are set to rise to 1.57 million bpd in the Eagle Ford and 2.87 million bpd in the Permian. And that’s not all. New well production is also increasing in the two Texas plays: for the Eagle Ford this averaged 1,200 bpd this month, but next month it will rise to 1,281 bpd, according to the EIA. Average new well production in the Permian was lower than this, at 628 bpd this month but expected to rise to 632 bpd in February.”