ExxonMobil will expand its share buyback program to $50 billion as the US major defies political backlash by giving investors dividends from rising oil and gas prices.
Exxon said it would spend $50 billion in the three years to 2024 to buy back its shares, an increase from the current $30 billion program that was set to expire in 2023.
oil Earnings have soared this year after Russia’s invasion of Ukraine sent global crude oil and natural gas prices soaring, which producers are used to dumping shareholders cash after years of disappointing returns.
US President Joe Biden has criticized Exxon and other oil companies, saying in October that “You shouldn’t use your earnings for stock buybacks or for dividends . . . while the war is raging.”
But the expanded share buyback program continues Exxon’s focus on funneling proceeds from higher energy prices back to shareholders, rather than splurging on a big new drilling campaign.
made the strategy Exxon Among the market’s best performers this year, shares are up more than 60 percent even as the broader S&P 500 plunges.
“The results we’ve seen so far show that we’re on the right track,” said Exxon CEO Darren Woods.
The company said Exxon will also spend between $23 billion and $25 billion on energy projects next year, up from about $22 billion this year. Exxon increased its planned spending on low-carbon projects, which focus on carbon capture and storage, biofuels and hydrogen, to $17 billion through 2027, up from its previous guidance of $15 billion.
But the Texas-based oil producer maintains a projected annual spending range of $20 billion to $25 billion over the next five years, resisting large increases in spending at a time when oil and gas prices have soared as the industry has in the past.
Exxon’s rival Chevron said Wednesday it will increase its spending by 25 percent next year to about $17 billion, including $2 billion on its low-carbon business.
The two companies’ spending plans are still well below what they indicated before the pandemic, which has taken a huge financial toll on the companies. Exxon said in 2019 that it plans to spend $30 billion to $35 billion annually on its business, while Chevron has planned annual spending of $19 billion to $22 billion.
The bulk of Exxon’s spending will go to oil and gas projects in the Permian shale basin in the United States, deepwater projects in Guyana and Brazil and new LNG projects. The company says it will increase total production by 14 percent from 3.7 million barrels of oil equivalent per day this year to 4.2 million barrels per day by 2027.
The increased spending comes as oil prices have slumped in recent weeks on fears that an economic slowdown will sap global energy demand.
Brent crude traded at about $78 a barrel Thursday, down 20 percent over the past month and roughly level with where it opened the year, a significant reversal after it jumped to near record highs over the summer.
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