Oil major ExxonMobil will make an impairment charge of $17 billion to $20 billion in the last quarter of the year after removing certain dry gas assets from its development plan and reduce spending plans for the next year.
ExxonMobil said on Monday it has completed a review of its forward business plans.
Under the plan, ExxonMobil said it would prioritize near-term capital spending on advantaged assets with the highest potential future value, including developments in Guyana and the U.S. Permian Basin, targeted exploration in Brazil and Chemicals projects.
Darren Woods, chairman and chief executive officer for Exxon Mobil Corporation, said: “Continued emphasis on high-grading the asset base – through exploration, divestment and prioritization of advantaged development opportunities – will improve earnings power and cash generation, and rebuild balance sheet capacity to manage future commodity price cycles while working to maintain a reliable dividend”.
ExxonMobil has lined up several priorities and actions as part of its annual business plan.
These include leveraging the significant cost savings realized in 2020 that are on track to exceed announced reductions of $10 billion or 30 per cent of capital spending and 15 per cent of cash operating expenses.