New Exxon chief enters the market, cautiously

HOUSTON—Darren Woods, the new CEO of Exxon Mobil, is a veteran of the more cautious refining side of the oil business who is likely to focus relentlessly on controlling costs.

Woods may take a more hesitant approach to deal-making than his predecessor, Rex Tillerson, who hailed from the more swashbuckling exploration side and famously did business with Russian President Vladimir Putin.

It’s unclear whether Woods will be any more successful than Tillerson in achieving peace with environmental critics. The early signals are mixed.

Woods was little known outside the company even after emerging as Tillerson’s heir apparent. Two months after taking over, Woods is making his first public rounds, meeting with investors last week and speaking Monday at a major energy conference in Houston.

Woods, 52, joined Exxon in 1992 and has spent most of his career in chemicals and refining, the so-called downstream part of the business.

“There is a different psychology in downstream than there is in oil and gas wildcatting,” said Cowen analyst Sam Margolin. “Downstream is very much about managing costs and trying to get the most out of the least effort.”

Tillerson left Woods plenty to work on. Exxon Mobil Corp. earned a record $45.2 billion in 2008 and nearly matched that in 2012. With oil prices slumping, profit has tumbled, falling to $7.8 billion last year—the company’s smallest gain since 1998.

Along the way, Exxon lost its coveted AAA credit rating. Lower oil prices forced it to write down assets. At Exxon’s size, replacing oil reserves is always challenging.

Woods also faces pressure from shareholders to protect the dividend and revive share buybacks. At last week’s investor event in New York, he vowed to grow dividends and buy back stock when possible.

Woods detailed a growth plan that relies heavily on drilling in the Permian Basin of Texas and New Mexico and the Bakken shale formation in North Dakota, balancing that with big, longterm projects around the world.

After spending $19 billion in 2016, Exxon plans to invest $22 billion in the business this year and raise that to an average of $25 billion a year from 2018 through 2020. Still, those budgets look disciplined in comparison to the freewheeling years of 2010 through 2015, when spending topped $30 billion every year.