On Monday Exxon announced plans to invest $3 billion in carbon capture and other emissions-cutting technology.
The new business, called ExxonMobil Low Carbon Solutions (ELCS), will initially focus on carbon capture and storage (CCS), according to Exxon, which labeled CCS as one of the critical technologies required to achieve net zero emissions and the climate goals outlined in the Paris Agreement. These investments would represent approximately 3% to 4% of Exxon's planned annual capital expenditure.
Signs point to better results for the oil giants this year. Over the past five years, the companies have been working on carbonate fuel-cell technology that captures carbon dioxide spewed from industrial operations and uses it in a chemical process to generate electricity. It also posted losses in the first three quarters of 2020; fourth quarter results will be revealed on Tuesday.
Exxon and Chevron discussed merging the oil companies past year, a move that would have likely created the second-largest oil company in the world, The Wall Street Journal reported Sunday. The discussions were described as preliminary and aren't ongoing but could come back in the future, the people said. Exxon's stock was hit hardest, as investors raised concerns about the company's long-term profitability and spending decisions. Some institutional investors and ecological gatherings are additionally pushing Exxon and different organizations to cut outflows from their tasks and the utilization of their items.
The talks between Chevron CEO Mike Wirth and Exxon CEO Darren Woods took place in the early days of the coronavirus pandemic, which battered the oil sector, the Journal reported, citing a source familiar with the matter.
Exxon specifically has been a continuous target of such campaigns in light of the fact that, dissimilar to European oil giants like BP and Royal Dutch Shell, it has not put resources into environmentally friendly power or looked to set goal-oriented environment targets. Both have said they will invest heavily in renewables - a strategy their investors have so far failed to reward.
The merger between the US' two leading oil companies would have been the largest in history, creating the world's second biggest oil company by market capitalisation, with a $350bn value, and by production, flowing 7mn barrels of oil and gas equivalent/day.
Such a deal would reunite the two largest descendants of John D. Rockefeller's Standard Oil monopoly, which was broken up by USA regulators in 1911, and reshape the oil industry.
Exxon and Chevron, with their powerful balance sheets, withstood turmoil in energy markets following the pandemic that forced some smaller independent oil and gas producers to file for bankruptcy protection.
Government support is needed to make carbon capture more commercially viable, Exxon also said in the statement. He supported an existing tax credit in the United States for companies that capture and store carbon.