Exxon Mobil said on Thursday it would boost spending this year on new and existing projects even as some rivals cut back because of weak global demand for energy.
Chairman and CEO Rex Tillerson told analysts during a meeting in New York that the world’s largest publicly traded oil company intends to boost capital spending by 3 percent to about US$28 billion.
Spending should range between US$25 billion and US$30 billion a year on average through 2014.
Tillerson said global energy demand is expected to grow nearly 35 percent by 2030 with fossil fuels remaining the dominant source, although natural gas will outpace coal.
“We are executing a large inventory of projects and many others are under development,” he said.
Last year, Exxon Mobil’s capital expenditures totaled US$27.1 billion. Many of the company’s rivals have cut spending to match declining use of oil, gasoline and other products.
Marathon Oil Corp plans to cut capital spending by 17 percent this year to US$5.1 billion, slashing its budget for refineries by more than half.
Chevron Corp said it would cut spending by US$1 billion this year on downstream businesses, which includes refining, marketing and transportation.
Exxon Mobil’s earnings fell by more than half to US$19.3 billion last year as its refining business struggled following a plunge in global fuel consumption.
The company, based in Irving, Texas, is expanding natural gas operations. It plans to buy XTO Energy in a deal that worth about US$29 billion when it was announced in December. Tillerson said he expected the transaction to be completed in the second quarter.
XTO is a major holder of natural gas assets in the US, and Exxon Mobil would become a key player in what is expected to be a robust market for the cleaner-burning fuel.
Tillerson said the market for natural gas will grow over the next 20 years as more power plants shift from coal to natural gas. He does not believe natural gas will become a popular fuel for vehicles because of the challenges involved in converting it to that use.
He also said refueling stations for natural gas would be expensive to build, and it would take longer for consumers to fill their tanks with natural gas than gasoline or diesel.
“We just don’t see natural gas as a viable transportation fuel,” he said. “We don’t think the consumer is going to be particularly pleased with what they have to do.”
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