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October 21, 2021

Exxon board considers exiting major oil and gas projects

The assets being weighed for divestment include the $30bn Mozambique LNG project and Vietnam gas project.

By Archana Rani

Exxon Mobil board is reportedly considering dropping major oil and gas projects in Mozambique and Vietnam, as the company reviews its spending plan for the next five years.

The debate over the major projects comes amid pressure from investors to hold back on investments in fossil fuel and reduce CO₂ emissions, sources familiar with the matter told The Wall Street Journal (WSJ).

Exxon is also being urged by environmentalists and some government officials to reduce the production of oil and gas.

The assets being considered for possible sale include the $30bn LNG development project in Mozambique and an undisclosed multibillion-dollar gas project in Vietnam, according to the report.

Exxon’s remade board of directors are due to vote on a five-year spending plan at the end of this month, reported WSJ.

It isn’t clear whether a decision on the Mozambique or Vietnam projects would be made by the board during the review.

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No final investment decisions have been taken on the Mozambique and Vietnam projects, which have been facing delays due to sour gas and high costs.

Concerns are being raised by Exxon board members whether these two projects would return the required upfront investment, according to the WSJ report.

Exxon spokesman Casey Norton was cited by the WSJ as saying: “Any depiction of the board’s discussions as being less than constructive in tone or substance is wrong.”

Moreover, the energy firm is expected to announce its plan in coming weeks to increase its investment by billions of dollars in a low-carbon unit, reported WSJ citing people familiar with the matter.

Initially, the company said it would make a $3bn investment in the unit until 2025. The investment was aimed at commercialising carbon capture and storage, biofuels, hydrogen, and other technologies.

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