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ExxonMobil targets US$30 breakeven by 2030 – CEO Woods
ExxonMobil Corporation Chief Executive Officer (CEO), Darren Woods
Kaieteur News – American oil giant, ExxonMobil Corporation is working to reduce its global breakeven oil production cost to US$30 per barrel by 2030, as part of its broader strategy to boost profitability and operational efficiency. This was disclosed by the company’s Chief Executive Officer (CEO), Darren Woods, during the company’s latest earnings call.
“Our quarterly earnings power by US$4 billion at current prices and margins. Our ongoing transformation to become a more efficient company, with a lower cost of supply, is driving lower break-evens with firm plans to improve them to US$35 per barrel by 2027 and US$30 per barrel by 2030.” Breakeven is the point at which cost and income are equal and there is neither profit nor loss.
Woods outlined that these improvements are being achieved through earnings growth and cash flow rather than by slashing capital investments.
Meanwhile, ExxonMobil Guyana Limited (EMGL) operation in Guyana has consistently praised the country’s projects for its high returns and low-cost structure. Similar to Woods statement, EMGL’s Vice President and Business Services Manager, Phillip Rietema, previously highlighted that Exxon Guyana’s operations in the Stabroek Block remain profitable even amid market volatility.
Rietema had said that Guyana’s deep-water projects are designed to withstand price fluctuations having an average breakeven price of around US$40 per barrel across developments. He stressed that cost efficiency is central to Exxon’s approach in Guyana, noting the importance of driving down costs wherever possible.
He explained that the oil and gas industry is a very volatile market which results in limited control over revenues by oil companies. As such, he noted that Exxon focuses on being as efficient as possible and having the lowest costs.
Rietema had elaborated on the concept of breakeven, which refers to the average oil price required to pay back the investment and achieve a return. He stated that ExxonMobil aims to have the lowest cost projects, positioning them advantageously on the cost of supply curve.
“The projects here in Guyana, they compete internationally, they are some of the best deep-water projects in the world,” Rietema said.
Addressing the price fluctuations, he pointed out that the projects are designed to withstand market volatility, adding that, “in 2020, it was down to US$40. So, these projects, they all have costs of supply under US$40 a barrel…as a team look to optimise the projects we try and drive that down as low as possible. Again, every dollar counts, every dollar matters.”
ExxonMobil Guyana operates the Stabroek Block with a 45 per cent stake, alongside Hess Guyana Exploration Ltd. (30 per cent) and CNOOC Petroleum Guyana Limited (25 per cent). Production offshore Guyana has been a major driver of Exxon’s global output, with over 650,000 barrels per day (bpd) daily production rate.
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