(Bloomberg) — Exxon Mobil Corp. will keep its capital allocation plans intact even if oil declines toward $50 a barrel, Chief Executive Officer Darren Woods said.
Late last year, the Texas oil giant stress-tested its business at “more punitive scenarios” than the current environment and brought the results to the board, Woods said at Exxon’s annual meeting Wednesday. The result is that the company will continue investing in new projects and returning cash to shareholders even if oil declines from the current $65 a barrel.
Though the company has the ability to be flexible, Wood said, “We don’t see the need to change even at a price as low as $50 a barrel.”
“For differentiated long term value we must invest in profitable growth and advantaged investment opportunities,” he added.
Exxon plans to bring on a 250,000 bpd expansion project in Guyana later this year, adding to global supplies at a time when OPEC and its allies are increasing production. Brent crude has tumbled 12% since the beginning of April, prompting bp Plc and Chevron Corp. to reduce share buybacks.
