• ExxonMobil strategy at odds with those of Statoil and Shell

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      Patrick Lavery

      Combustion Industry News Editor

Following the strategic repositionings of Statoil and Shell covered in the Combustion Industry News so far this year, ExxonMobil has released its annual Outlook For Energy report, a part of which, Positioning for a Lower-Carbon Energy Future, has been released in response to shareholder demand. The company’s positioning appears to be somewhat in contrast to that of Statoil and Shell, with ExxonMobil seeming to focus more on its traditional oil and gas business rather than becoming a broader-ranging “energy company”. It sees in the future an appreciable rise in demand for natural gas, and a shift in demand for oil from light transport to chemicals manufacturing and heavy transport, and it is this new demand the company is targeting. While it expects a 400% increase in electricity production from solar and wind power (and a 45% decline in the carbon intensity of economic activity), renewable energies do not appear to be a focus for ExxonMobil. Instead, it will continue to seek to pioneer carbon capture and storage technology as well as lower-carbon liquid fuels (such as certain types of biofuels). Interestingly, and in stark contrast to Shell’s position, ExxonMobil does not believe it is at much risk of having ‘stranded’ fossil fuel assets, stating in its report “Considering the 2 °C Scenarios Average [its models for meeting the Paris Agreement targets], we believe our reserves face little risk,” though it acknowledges that “it is possible that some higher cost assets, which could be impacted by many factors including future climate policy, may not be developed.” There may well be room for a more traditional oil and gas business in the future, especially if other competitors place less emphasis on it, creating some market space, but the contrasting strategies do give one the feeling that one side will be proven more right than the other. On the other hand, it may partly be a matter of the language used to describe the strategies.