global refining : delivering long-term...
TRANSCRIPT
Taking on the world’s toughest energy challenges.™
J. Steve SimonSr. Vice President, Exxon Mobil Corporation
Goldman Sachs Global Energy ConferenceJanuary 18, 2006
J. Steve SimonSr. Vice President, Exxon Mobil Corporation
Goldman Sachs Global Energy ConferenceJanuary 18, 2006
Global Refining :Delivering Long-Term ValueGlobal Refining :Delivering Long-Term Value
Cautionary StatementForward-Looking Statements. Outlooks, projections, estimates, targets, and business plansin this presentation are forward-looking statements. Actual future results, including demand growth and mix; vehicle fleet composition; refinery additions and capacity increases; project plans, timing, and costs; efficiency and cost improvements; and the impact of technology could differ materially due to a number of factors. These include changes in long-term oil or gas prices or other market conditions affecting the oil and gas industries, including changes in refining or marketing margins; severe weather events; war and other political or security disturbances; changes in law or government regulation; the outcome of commercial negotiations; the actions of competitors; unexpected technological developments; the occurrence and duration of economic recessions; and other factors discussed here and under the heading "Factors Affecting Future Results" in the Investor Information section of our website at www.exxonmobil.com.
Frequently Used Terms. For definitions and additional information regarding return on capital employed, normalized earnings (also referred to as operating earnings), cash flow from operations and asset sales (also referred to as operating cash flow), and other terms used in this presentation, including information required by SEC Regulation G, see the “Frequently Used Terms”, quarterly reports on form 8-K regarding results of operations and financial condition, and other material posted on our website. The Financial and Operating Review on our website also shows ExxonMobil's net interest in specific projects.
Disciplined Investment
OperationalExcellence
IndustryLeadingReturns
SuperiorCash Flow
Growth in Growth in ShareholderShareholder
ValueValue
Long-standing ExxonMobil Approach
0
50
100
150
200
250
300
350
1980 1990 2000 2010 2020 2030
World Energy Demand Continues to Grow
MBDOE
Oil
Gas
Coal
Nuclear
Hydro
Bio/MSW
Solar/Wind
• Energy demand up 50%
• Fossil fuels remain predominant
• Oil demand grows @ 1.4%/yr
0
40
80
120
2000 2010 2020 2030
Oil Demand Continues to Grow
MBD
Transportation
OtherElectricityChemicals
• Driven by emerging markets
• Led by transportation sector
0
40
80
120
2000 2010 2020 2030
MBD
Non-OECD 2.5%/yr
OECD0.3%/yr
Heat/Other
Oil Demand By SectorOil Demand By Market
Vehicle Fleet Changing
North America
0
100
200
300
400
500
2000 2010 2020 2030
Million
Light Duty Fleet
Europe
0
100
200
300
400
500
2000 2010 2020 2030
Million
Asia Pacific
0
100
200
300
400
500
2000 2010 2020 2030
Million
Gasoline
Diesel
Hybrid
Fuel Efficiency Dampens Demand
Asia Pacific
0
2
4
6
8
10
12
2000 2010 2020 2030
Light Duty Fuels Demand
MBDOE
Europe
0
2
4
6
8
10
12
2000 2010 2020 2030
MBDOE
North America
0
2
4
6
8
10
12
2000 2010 2020 2030
MBDOE
Gasoline
Diesel
Refining Capacity Growing
Global Distillation
• Refining capacity up 1.5% – 2.3% per year
• Growth via new builds and debottlenecks
0
3
6
9
12
2005 2006 2007 2008 2009 2010
ROW
NA
∆ MBD
High Case
(cumulative)
0
5
10
15
20
1990 1995 2000 2005 2010 2015 2020
Refining Balances – U.S. Perspective
Source: EIA, EM Estimates
MBD
Gasoline Demand
Distillate Demand
U.S. Gasoline and Distillate Balances
ImportsDomestic Refinery Output
Historic Growth @ 1.4%/yr
Refining Balances – Global PerspectiveMBD
Source: IEA / EM Estimates
0
10
20
C le a n P ro d u c ts P ro d u c tio n C a p a c ity D e ma n d
0
10
20
C P C a p a c ity D e ma n d
0
10
20
C P C a p a c ity D e ma n d
0
10
20
C P C a p a c ity D e ma n d
0
10
20
C P C a p a c ity D e ma n d
0
10
20
C P C a p a c ity D e ma n d
North America
South America
Western Europe
Africa/Middle East
Eastern Europe/FSU
Asia Pacific
Light Products Capacity Light Products Demand
MBD
MBDMBD
0
2
4
6
8
10
1985 1990 1995 2000 2005
Industry Margins – Long-term Perspective
2005 $/bbl
GlobalComposite
Refining Gross Margins
Higher Value Products
Raw Material Flexibility
Lower Costs
RawMaterials
Costs
Operating CostsOperating Costs
Net Margin
‘Self-Help’ Margin Levers
Downstream Revenue, $
Current
Global Scale and Integration
Americas16 Refineries
Europe/AME18 Refineries
Asia-Pacific11 Refineries
• Largest Global Refiner
• Largest Lubes Basestock Supplier
• Largest Global Producer of Polyolefins, Benzene & Paraxylene
100
150
200
250
XOM BP RDS Industry50
60
70
80
XOM RDS BP Industry
Structural Advantages
Average Refinery Size
%kBD
Source: O&GJ and ATEC
Integration with Chemicals or Lubes
Capacity and Geographic Mix
EAME
• Industry-leading size and integration
• Strong position in mature markets
• Well-positioned for AP growth
0
2
4
6
XOM RDS BP
MBD
AmericasAmericas
EAMEEAME
APAP
Raw Material Flexibility
70
80
90
100
110
120
2000 2002 2004
Crude Sulfur - US
XOM
Industry
95
100
105
110
2000 2002 2004
Crude API Gravity - US
XOM
Industry
• Increasing challenged and heavier crude runs• Capturing Light / Heavy and Sweet / Sour differentials• Lowering raw material costs via ‘fingerprinting’ technology
90
100
110
120
130
140
2000 2002 2004
Crude Runs - GlobalIndexed
XOMChallenged
Crudes
Indexed Indexed
Source: EM, Solomon
7.0
7.1
7.2
7.3
2000 2002 2004
Economic Capacity Growth
Global Conversion Capacity
Source: EM / OG&J, 100% basis
Global Distillation Capacity
~50 kBDper year
XOM
2.4
2.5
2.6
2000 2002 2004
~35 kBDper year
XOM
“Equivalent to a new refinery every 3 years”
MBD
MBD
Asset Utilization
Source: EM, Solomon
94
96
98
100
102
2000 2002 2004
Capacity Utilization
XOM
Industry
60
70
80
90
100
110
2000 2002 2004
Throughput
Unplanned Capacity Loss
Unit ReliabilityIndexed
XOM
• Unit reliability lowers cost / increases throughput• Increasing utilization with technology
– Global Reliability and Maintenance Management System– Equipment Health Monitoring
Indexed
Operating Cost Efficiency
Source: Solomon
94
96
98
100
102
104
2000 2002 2004
Energy
XOM
Industry
90
100
110
120
130
2000 2002 2004
Workforce
XOM
Industry95
100
105
110
115
2000 2002 2004
Unit Cash Costs
XOM
Industry
Index
Index
Index
Higher Value Products
• More conversion capacity• Superior integration with Lubes and Chemicals • Increasing yield of higher value products with technology
– Molecule Management– Process modeling and optimization
96
98
100
102
2000 2002 2004
Clean Product Yields
XOM
Industry
Source: OG&J, Solomon
0
1
2
3
XOM RDS BP
Conversion Capacity
IndexMBD
50
60
70
80
XOM RDS BP Industry
%
Integration – L&C
Erosion Resistant MaterialsLow Energy Membrane SeparationsAdvanced Catalysis Fouling Inhibition TechnologyEquipment Health Monitoring
Rapid Cycle Pressure Swing AdsorptionProcess Modeling & Optimization ToolsPlant AutomationMolecule Management
Crude Contaminant ControlFiber Optics Corrosion SensorsCoke MorphologySlurry Decoking Throttling Valve
Higher Value Products
Improve EfficiencyHigher ReliabilityCapacity Utilization
Higher YieldsUpgrade ProductsIncrease Margin
Lower Crude CostsCapacity UtilizationMolecular Optimization
Raw Material Flexibility
Lower Costs
Advanced Technology Underpins Results
Focus AreasStrategic
Objectives R&D Programs
“Self-Help”
“Self-Help” Delivers Earnings Growth
1999 2004
Lower Costs
Raw Material Flexibility
$5.7B
$1.2B
Industry Margins
Higher Value Products
Downstream
InflationForex
05
10152025
ExxonMobil Delivers Superior Returns
0
20
40
Capital Employed$B
‘00 ‘04 ‘00 ‘04 ‘00 ‘04
XOM RDS BP
‘00 ‘04 ‘00 ‘04 ‘00 ‘04
% Return on Capital Employed*
0
2
4
6
8
Reported Net Income
‘00 ‘04 ‘00 ‘04 ‘00 ‘04
$B
*Calculated based on public information.Note: Impact of Allapattah reserve shown by red hatched box.
Downstream
Taking on the world’s toughest energy challenges.™
J. Steve SimonSr. Vice President, Exxon Mobil Corporation
Goldman Sachs Global Energy ConferenceJanuary 18, 2006
J. Steve SimonSr. Vice President, Exxon Mobil Corporation
Goldman Sachs Global Energy ConferenceJanuary 18, 2006
Global Refining :Delivering Long-Term ValueGlobal Refining :Delivering Long-Term Value