March 7, 2018 Read More →

ExxonMobil’s Abandoned Ventures Weigh on Company’s Financials


ExxonMobil Corp’s (XOM.N) $200 million write-down last month on abandoned ventures in Russia – once its next big frontier – points to challenges facing Chief Executive Darren Woods in his second year leading the world’s largest publicly traded oil producer.

Some of the biggest bets taken by his predecessor Rex Tillerson, now the U.S. secretary of state, have resulted in billions of dollars in write-downs amid falling production and a stock price that has long lagged peers.

That leaves Woods facing the prospect of slow growth and billions of dollars in new spending that could weigh on results for years. In 2018, the company plans capital spending of about $24 billion – up about a quarter since 2016 – suggesting return on capital will get worse before it gets better as the firm waits for a payoff from new exploration under Woods.

Rivals including Royal Dutch Shell (RDSa.L) and Chevron (CVX.N), by contrast, have capped or cut their spending after finishing expansion projects. Exxon shares are down 18 percent since Woods took over in January 2017. Shell is up 2 percent and Chevron is down about 3 percent during the same period.

Woods is feeling the heat from investors who could have made more if they held shares in Exxon’s rivals, as well as activist investors who want to see the company take renewable energy more seriously. Analysts are pushing for more transparency on operations, and some have called for Woods to sell assets.

More: Exxon CEO struggles to reverse Tillerson’s legacy of failed bets

Comments are closed.