Exxon names Darren Woods as new boss to re­place Rex Tiller­son

China Daily (Hong Kong) - - Q&A WITH CEO - By BLOOMBERG

Exxon Mo­bil Corp named Darren Woods, the heir ap­par­ent who built the com­pany’s re­finer­ies into profit cen­ters, to suc­ceed Rex Tiller­son as chair­man and chief ex­ec­u­tive of­fi­cer, ef­fec­tive Jan 1.

Woods, the com­pany’s re­fin­ing boss since 2012, was el­e­vated af­ter pres­i­dent-elect Don­ald Trump picked Tiller­son to be­come US Sec­re­tary of State, the Irv­ing, Texas-based oil ex­plorer said in a state­ment on Wednesday.

Even if Tiller­son doesn’t be­come the top US diplo­mat — three Repub­li­can sen­a­tors have ex­pressed mis­giv­ings about his nom­i­na­tion — he was due to leave no later than March when he reaches Exxon’s manda­tory re­tire­ment age.

Woods, 51, in­her­its a drill- ing and re­fin­ing be­he­moth ham­strung by a two-and-ahalf year slump in en­ergy mar­kets, and ill-timed in­vest­ments in North Amer­i­can shale and Rus­sia.

Still, Trump’s elec­tion, OPEC’s plan to cut pro­duc­tion and Woods’s abil­ity to boost the value of the com­pany’s re­finer­ies have all com­bined to change the face of the in­dus­try for Exxon head­ing into the fu­ture.

“Val­i­dat­ing the in­te­grated model will be the chal­lenge for the next leader of Exxon,” said Vincent Pi­azza, a se­nior an­a­lyst at Bloomberg In­tel­li­gence in New York. “Down­stream and chem­i­cals have been the few bright spots coun­ter­bal­anc­ing the neg­a­tive im­pact of prices on the up­stream seg­ment.”

Woods’s el­e­va­tion to chair­man and CEO was tele­graphed with his pro­mo­tion to pres­i­dent in Jan­uary, the same time he be­came a mem­ber of the board of direc­tors. He’s been on the six-per­son man­age­ment com­mit­tee that over­sees day-to-day op­er­a­tions since June 2014. He steps into the new roles ef­fec­tive Jan 1.

Re­fin­ing re­ver­sal

For the past five quar­ters at Exxon, re­fin­ing has out­per­formed so-called up­stream oil and nat­u­ral gas wells, a re­ver­sal of the tra­di­tional re­la­tion­ship. Since June 2015, Exxon’s re­finer­ies and re­lated busi­ness lines raked in $6.34 bil­lion, com­pared with $3.05 bil­lion for the oil and gas busi­ness. Dur­ing that same pe­riod, re­fin­ing burned through $3.1 bil­lion in cap­i­tal spend­ing, com­pared with $23.2 bil­lion in the up­stream seg­ment.

A Kansas-born elec­tri­cal en­gi­neer by train­ing, Woods joined Exxon as an an­a­lyst in 1992 and rose through the ranks on the re­fin­ing and chem­i­cals side of the busi­ness. His main ri­val in the com­pe­ti­tion to suc­ceed Tiller­son was Jack Wil­liams, a drilling en­gi­neer who over­saw oil and gas projects from Louisiana to Malaysia be­fore tak­ing con­trol of XTO En­ergy, the shale ex­plorer Exxon bought in 2010 for $35 bil­lion.

One of Woods’s most-press­ing tasks will be fig­ur­ing out how to res­cue a still­born Rus­sian joint ven­ture that locked up $1 bil­lion in in­vest­ments and a bil­lion-bar­rel Arc­tic oil dis­cov­ery be­hind a wall of in­ter­na­tional sanc­tions.

Rus­sia quandary

When Exxon signed a 2011 agree­ment to join with Ros­neft PJSC in drilling Arc­tic, deep­wa­ter and shale fields, it was seen as a crown­ing achieve­ment of Tiller­son’s ca­reer. But the work slammed to a halt when the US and Euro­pean Union im­posed eco­nomic sanc­tions against Rus­sia in 2014. The ven­ture has been mostly idle ever since.

On the home front, Woods will face al­le­ga­tions by at­tor­neys gen­eral from New York, Mas­sachusetts and other states that Exxon mis­led in­vestors about the threat posed to the com­pany’s port­fo­lio by cli­mate change. Un­der Tiller­son, the com­pany has ag­gres­sively de­fended its record.

Exxon shares have risen 16 per­cent this year, lag­ging the 19 per­cent ad­vance by the Bloomberg World Oil & Gas In­dex. Chevron Corp and Royal Dutch Shell Plc have also out­per­formed their big­ger ri­val, with gains of 29 per­cent and 40 per- cent, re­spec­tively.

Woods made $28,848 in po­lit­i­cal con­tri­bu­tions dur­ing the past four years. The big­gest re­cip­i­ent was Exxon’s po­lit­i­cal ac­tion com­mit­tee, which took in $13,700. Woods also gave the Repub­li­can Na­tional Con­gres­sional Com­mit­tee $10,000.

Exxon’s lead­er­ship change comes af­ter the Or­ga­ni­za­tion of Petroleum Ex­port­ing Coun­tries and sev­eral nonOPEC na­tions in­clud­ing Rus­sia com­mit­ted to cut­ting al­most 1.8 mil­lion bar­rels a day of crude start­ing next year. Oil in New York has risen about 15 per­cent to over $50 a bar­rel since the Nov 30 ac­cord.

Leg­endary oil ty­coon T. Boone Pick­ens sees crude reach­ing $60 a bar­rel within a month, and $75 some time next year. “I’m long oil,” Pick­ens said on Mon­day.

the rise in Exxon shares so far this year

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Darren Woods, newly named chair­man and CEO of Exxon Mo­bil Corp.

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