Competitive Advantage Through the Business Cycle

Transcription

1 Competitive Advantage Through the Business Cycle Michael J. Dolan Senior Vice President Merrill Lynch Global Energy Large Cap Conference New York December 2, 2008

2 Cautionary Statement Forward-Looking Statements. Outlooks, projections, estimates, targets, and business plans in this presentation or the subsequent discussion period are forward-looking statements. Actual future results, including demand growth and mix; ExxonMobil s own production growth and mix; the amount and mix of capital expenditures; resource additions and recoveries; finding and development costs; project plans, timing, costs, and capacities; revenue enhancements and cost efficiencies; industry margins; margin enhancements and integration benefits; and the impact of technology could differ materially due to a number of factors. These include changes in longterm oil or gas prices or other market conditions affecting the oil, gas, and petrochemical industries; reservoir performance; timely completion of development projects; war and other political or security disturbances; changes in law or government regulation; the outcome of commercial negotiations; the actions of competitors; unexpected technological developments; the occurrence and duration of economic recessions; unforeseen technical difficulties; and other factors discussed here and under the heading "Factors Affecting Future Results in the Investor section of our Web site at exxonmobil.com. See also Item 1A of ExxonMobil s 2007 Form 10-K. Forward-looking statements are based on management s knowledge and reasonable expectations on the date hereof, and we assume no duty to update these statements as of any future date. Frequently Used Terms. References to resources, resource base, recoverable resources, and similar terms include quantities of oil and gas that are not yet classified as proved reserves but that we believe will likely be moved into the proved reserves category and produced in the future. The discussion of reserves in this presentation generally excludes the effects of year-end price/cost revisions and includes reserves attributable to equity companies and our Syncrude operations. For definitions of, and information regarding, reserves, return on average capital employed, normalized earnings, cash flow from operations and asset sales, and other terms used in this presentation, including information required by SEC Regulation G, see the "Frequently Used Terms" posted on the Investor section of our Web site. The Financial and Operating Review on our Web site also shows ExxonMobil's net interest in specific projects.

3 Proven Long-Term Approach Disciplined Investment Superior Cash Flow Growth in Shareholder Value Operational Excellence Industry Leading Returns

4 Industry Leading Results Return on Capital Employed* 5-Year Rolling Average % Consistently outperform competition 22 XOM RDS CVX BP Results from implementation of business model * Competitor data estimated using a consistent basis with ExxonMobil, and based on public information

5 Business in Perspective Average Business Earnings Corporate Average $32.6B Corp & Fin $0.3B Chemical $3.6B Downstream $7.0B Upstream $21.7B

6 Global Downstream Operations Refineries (37 Total) Europe/AME 11 Refineries Americas 15 Refineries Asia Pacific 11 Refineries Largest global refiner Largest global supplier / marketer of petroleum products Largest manufacturer and marketer of basestocks and synthetic lubes

7 Downstream Portfolio Refining & Supply Refinery capacity 60% larger than industry 75% integrated with Chemical or Lubes Fuels Marketing Retail and Business to Business segments Secure and ratable outlet for refineries Lubricants & Specialties Product technology leadership Strong growth in emerging markets

8 Downstream Industry Environment Industry Demand* Refining Gross Margin* MBD Asia Pacific US Europe Constant $/bbl Global Composite *ExxonMobil estimates

9 Global Chemical Operations Large/Integrated Sites (16 Total) Europe/AME 8 sites Americas 5 Sites Asia Pacific 3 Sites Top petrochemical and top 3 chemical company globally More than 90% of capacity integrated with Upstream or Downstream One of the largest producers of olefins, polyolefins, and aromatics

10 Chemical Portfolio ExxonMobil Chemical Earnings $B Aromatics Olefins Polyethylene Polypropylene Cyclical Commodity Businesses 3.0 Butyl Polymers Specialty Elastomers Adhesive Polymers Fluids Oxo Alcohols Synthetics Films Petroleum Additives Less Cyclical Specialty Businesses

11 Chemical Industry Environment PE, PP, PX Demand* MTA Commodity Margin Trend* WW Growth ~5.5% p.a. Americas Composite Margin, Constant $/Ton China Asia, ex China MEAF Europe Key commodity demand growth > GDP Concentrated in Asia, China General downward margin trend Cycles driven by capacity utilization * ExxonMobil Chemical estimates

12 Business Strategies DOWNSTREAM CHEMICAL Deliver long-term growth in shareholder value that is superior to competition regardless of the market conditions by: Maintaining best-in-class operations, in all respects Providing quality, valued products and services to our customers Leading industry in efficiency and effectiveness Capitalizing on integration with other ExxonMobil businesses Selectively investing for resilient, advantaged returns Deliver superior returns and earnings growth through: A unique portfolio of global businesses Consistently delivering best-in-class performance Integration across ExxonMobil operations Disciplined investment in advantaged projects Technology leadership Maximizing value from leading-edge technology

13 Operational Excellence Operations Integrity Management System Controls Integrity Management System Plan Select Define Execute Operate ExxonMobil Capital Project System GEMS Global Energy Management System GRS Global Reliability System

14 Energy Efficiency / Cogeneration Global Energy Management Cogeneration

15 Energy Efficiency Refining Indexed 105 Industry Chemical (Steam Cracking) Indexed Industry XOM XOM Widening our efficiency advantage versus industry Source: Solomon Associates and ExxonMobil estimates Refining: Only even-year Solomon data plotted Chemical : Only odd-year Solomon Industry data plotted

16 Integration Crude Oil Natural Gas Power Plant Gas Processing LNG Plant Production Refining Chemical Fuels Marketing Lubricants & Specialties Chemical Products

17 Molecule Management Reduced Energy Use Crude Oil Process Models Higher Value Products

18 Technology Innovation First Commercial Petrochemical Isopropyl Alcohol Patented Thermal Cracking Process First Fluid Catalytic Cracker World s First Steam Cracker Invented Process for Butyl Rubber Patented ZSM-5 Catalyst Developed Process for Polypropylene Discovered Zeolite Catalysts Introduced Mobil 1 First MLDW Catalytic Dewaxing Unit Introduced Exxpol Metallocene Catalyst Developed Scanfining Process Introduced NEBULA-20 Catalyst Commercialized Rapid Cycle Pressure Swing Adsorption

19 Technology Leadership Lower Cost Processes Advantaged Feedstocks Higher Value Products Refining Catalysts Butyl Polymerization Feed Flexibility Methanol-to-Olefins Metallocene Polymers Synthetic Lubricants

20 Technology Leadership Catalysis Catalyst Development Cleaner Burning Fuels and Higher Quality Lubricants High Throughput Experimentation Efficient Operations

21 Technology Metallocene Catalysis Metallocene Catalyst Stronger Film Rapid Development Stretchable Fabrics Clearer Packaging

22 Superior ROCE Downstream* Chemical* % % XOM 30 XOM Dow 10 Integrated Oils (BP, CVX, RDS) 10 Integrated Oils (BP, CVX, RDS) * Competitor data estimated using a consistent basis with ExxonMobil, and based on public information

23 Company Strengths Portfolio Quality Global Integration Discipline and Consistency Value Maximization Long-Term Perspective Growing Competitive Advantage

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