ExxonMobil Tillerson shares plans to outpace industry competition
Posted: 10 November 2004
Exxon Mobil Corporation President Rex Tillerson recently told financial analysts in New York that ExxonMobil is outpacing its competition with a combination of financial strength, operational synergies, and industry-leading technology.
Tillerson, who earlier this year was named president of the corporation and a director of the board, cited more than $11 billion (net) in new potential world-class projects, including a Qatar Gas to Liquids (GTL) Plant, a Qatar Ethane Cracker, the Jose (Venezuela) Chemical Project and the Fujian (China) Refining, Chemicals and Marketing Joint Venture, all announced in 2004.
ExxonMobil spends more than $600 million a year on proprietary technology, more than any of its competitors.
"It will come as no surprise we believe our technology offers many advantages versus that of our competitors," said Tillerson. "The rapid growth of our Liquefied Natural Gas (LNG) production in Qatar is a great example of the benefits of partnering with ExxonMobil. We've leveraged our technology to redefine LNG scale -- we set a new benchmark in February this year with the start-up of the 4.7 million ton per year (MTA) Rasgas-3 project in Qatar; we'll raise the bar again in 2008, with the planned start-up of a 7.8 million ton per year plant in Qatar. We're also planning to build the largest LNG tankers the industry has ever seen, 250,000 cubic meters versus the 150,000 cubic meter ships in service today.
Tillerson added, "Advantages don't last forever, so the faster you deploy better ideas and new technology across your business, the more value you capture as a result." He said the same holds true in emerging markets.
ExxonMobil recently announced the only fully integrated project in China with the Fujian refining, chemicals and fuels marketing joint venture. "Some of our competitors have chosen to take a piecemeal approach to China, investing in only one part of the downstream supply chain. We believe our integrated approach is a more robust model for the long term and will ultimately be more successful given its significant competitive advantages," he said.
Tillerson noted that part of ExxonMobil's strength is to rapidly develop resources and reduce project cycle times by leveraging know-how and technology across global opportunities. "By using our 'design one, build many' concept with the Kizomba A project offshore Angola, we have significantly reduced the capital cost of the Kizomba B project, saving around $400 million and improving implementation time by 20 percent versus Kizomba A."
In discussing ExxonMobil's financial strength and flexibility, Tillerson said, "This is a well-established record of performance and good for anyone who chooses to partner with us." The company, he noted, has the financial stability to take on the world's toughest energy challenges.
Directly addressing shareholders, Tillerson said in the third quarter of this year, the company increased its share repurchase program by $1 billion per quarter to $2.5 billion per quarter net of any anti-dilution purchases. Dividend increases of 9 percent and 8 percent, respectively, over the last two years have continued the company's record of paying a dividend every year for more than 100 years with increases for the past 22 straight years.
Tillerson made his remarks at the Merrill Lynch Conference held at the St. Regis hotel in New York City .
Posted by Alexander Lindsay, Editor Pipeline Magazine
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