Woods ran Exxon’s refining division before becoming CEO two months ago, and the new spending benefits a sector with which he has significant experience and comfort. Investments in the high-margin projects should help ease concerns from Wall Street that Exxon’s growth potential — especially in oil and gas exploration and production — is sliding.
“Exxon Mobil is building a manufacturing powerhouse along the U.S. Gulf Coast,” Woods said. “These businesses are leveraging the shale revolution to manufacture cleaner fuels and more energy-efficient plastics.”
The investments across Texas and Louisiana will take advantage of cheap shale gas to make plastics and other chemicals for export. The strategy builds on prior steps Exxon and peers, including Dow Chemical, have taken in the wake of the American shale expansion, which sharply cut production costs.
“The supply is here. The demand is there. We want to keep connecting those dots,” Woods said.
Exxon last month pledged to boost this year’s spending by 16 percent to expand operations, especially in shale production, after the company posted a better-than-expected quarterly profit, helped by rising oil prices and lower costs.
U.S. President Donald Trump, who tapped former Exxon CEO Rex Tillerson for secretary of State, praised the company’s spending plans as an example of “a true American success story.” Most of the permanent jobs are expected to pay more than $100,000 per year.
“This is exactly the kind of investment, economic development and job creation that will help put Americans back to work,” Trump said. When asked if Trump was taking credit for an investment program that began under former President Barack Obama in 2013, White House spokesman Sean Spicer said that Exxon made it clear to the president it was investing more in the United States because of his push for fewer regulations and tax relief.
The bulk of the expansion will take place in Beaumont, Texas, with plans to expand polyethylene production, oil refining capacity and liquefied natural gas exports.
Exxon also will increase its lubricant manufacturing capacity and potentially build a new refinery to produce ethane, a key building block for chemical production.