Exxon Mobil Corporation ($XOM)

Good morning, and welcome to the second day of the 42nd Annual Bernstein Strategic Decisions Conference. I am Bob Brackett, co-Head of America's Energy and transition and global metals and mining. We are not expecting a fire drill or any sort of test. If the alarm rings, please take it seriously. Your primary exit is out the back door down to the right where I am pointing to the escalator area where you likely came up this morning down to the first floor, exit to the street and wait further instructions. If for any reason that path is blocked, there's a series of internal stair wells that you can choose. They'll take you down one floor to the ground floor and follow the lights there. Ultimately, this is your conversation. We call it a fireside chat. The way you can contribute and engage in the conversation is through the various blue pieces of paper that are scattered around the room. It has a QR code that gets you to the [ pigeon ] hole app that allows you to put your questions into the queue. While we wait for your questions to come in, Neil and I will have a conversation that's very much like a pyramid. We will start at a high level macro questions, move down to how that macro informed strategy, talk to operations and then we have time to get into technology and exploration and all sorts of good things. With that, I welcome Neil Chapman, Senior Vice President of Exxon Mobil. And I believe he has a few slides to share before we kick things off.

Yes, above very, very briefly, and I'll just be maybe 3 minutes, if that's okay, and then we'll get into the questions. In the last 6 years, we've rewired reengineered, reorganized this corporation we believe we've set ourselves up in the right place to address what we regard as a dual challenge. The world needs more energy, it needs more affordable energy, it needs more reliable energy to meet the growing needs in the developing economies and, of course, in this country for data centers, for example. We've done that by leveraging the core competitive advantages of this corporation. So very, very simple. The scale, we're the largest, execution excellence. We have the strongest, most reliable operations. We have the safest operation critically in a capital-intensive business, we execute major projects better than anyone else in the industry, on time, on budget and first quartile. We're a fully integrated company. We're balanced between fuels refinery, chemicals and the upstream. That gives us tremendous flexibility, and it's unique in our industry. And then the third advantage is technology. Every strategy of every business in ExxonMobil, the foundation is our proprietary technology. Those are the advantages. And over the last 6 years, why we did that restructuring and organizing. We've taken $15 billion of structural costs out of the business. I mean just to put that in perspective, that's more than all the other IOCs combined. We've divested $25 billion of less economic end-of-life assets. And through doing all of that, we've replaced these less economic, less growth potential assets with the strongest growth potential well recognized, in the industry, development potential. We've grown cash flow and earnings at double-digit levels each year through the last 6 years. Months ago, we laid out our plan to 2030. And what we said was we will continue to grow cash flow and earnings, double-digit levels annual growth rate through the next 6 years to the end of the decade, all of this at constant prices and constant margins. And just to illustrate the point, in the upstream by 2030, ExxonMobil will producing 5.5 million oil equivalent barrels per day. We don't have records that go back far enough to be at that level. Historically, our company as most people in the room will probably know we've been 3.7 million, 3.8 million oil equivalent barrels a day. We're already close to 5 million today, will be 5.5 million at the end of the decade. Critically, it's not just about growing volume. On constant prices, our earnings per barrel in 2030 will be 3x on average what they were in 2019. So we've done a lot to restructure this business. A lot of people say to me, okay, I've seen your plan to 2030, what goes beyond there? Well, we haven't issued a plan for 2030, but our Chairman has indicated on multiple occasions. We would expect, we anticipate we have the potential to continue on this growth trajectory well into the 2030s. So that's what we've been doing as a company in terms of shareholders, our dividend, we've grown dividend each year for 43 years. Our total dividend, I think it's the second largest in the S&P 500. It's not second, it's right up there. We've bought back $20 billion of shares last year were on plan to buy back $20 billion of shares this year. And you can see the earnings potential 13% per year between now 2030. It's unmatched in our industry. There isn't any other company in this oil and gas and petrochemical industry that has anything like that kind of potential in the next years. That differentiates us, Bob, than the others, clearly differentiated versus the other IOCs. And I think importantly, if you benchmark that kind of data versus the large cap industrial companies. We're right up there with the very best, if not better, than all of those. I've gone over 3 minutes, but hopefully not too much over like you get the question.

Fantastic. And it is funny. The oil and gas industry plans on a period of time, 2030 is fairly well baked for you all. You know what you'll be doing. 2035, you sort of know what you're doing, and you'll let us know in 2030, I think every semiconductor in the market today will be obsolete in 2030.

Absolutely.

Every AI tool in the market today will be obsolete in 2030, you know what you'll be doing. Today, in terms of the macro, I don't know what we're doing. Well, let's start with people, which is roughly 20% of your volumes come or produced with west of the Strait of Hormuz and perhaps 15% or so move through historically the Strait of Hormuz. That means you have operations, you have people you have friends on the ground? What's the situation there?

Well, let's put the volumes in perspective. Obviously, Strait of Hormuz closed. We have a big position in Qatar in LNG. We have a big position in the Emirates, in Upper [ Zakum ] with our partner, [ ADNOC ]. Total, it's about 15% of our production from those 2 assets flows through the Strait of Hormuz. We still have people on the ground there today. We are part of an operator. We're a joint venture operator in both assets. We did take a lot of families out safely. Actually, if you go into [ Doha ], it's pretty much business as normal. I myself was there during the middle of this. And so in [ Doha ] itself, the malls are full, the streets are full. Hotels are empty. Airport is empty. But it's pretty much business as normal.

And then if economics is the allocation of scarce resources, we have a scarce region, we have 2 scarce resources. We actually have more to that are relevant for us. And normally, economics is fixed with free market prices or with the hand of the state policies, what is happening -- why is petroleum economic seemingly broken? Why do we see $90 on our screen in a world where we've disrupted this level?

Well, I think most people don't really appreciate what's happened. You take arguably 11 million or 12 million barrels a day of crude oil out of the global market. The market is about 100 million, 103 million, 104 million barrels a day. Normally, you'd see prices go through the roof. So what's happened to mitigate that? Well, first of all, the Saudis maxed out on their East West pipeline. So they're running 5 million barrels a day of crude from the east to the Red Sea and obviously, you can get into the global market. I think what people appreciate less, there was a lot of sanctioned crude oil on the water. In other words, unsold, Iranian, Venezuelan -- Venezuelan, Russian crude was -- and that has now gone to the market, and that's mitigated some of the loss of oil through the Strait of Hormuz. Most importantly, though, is what's happened to [ inventory ] and this really is a telltale for what could well happen in the coming weeks. Commercial inventories of crude oil of liquids-linked petroleum, gasoline, diesel, jet fuel, they've all run down and running down those inventories as mitigated or offset supplemented by the release of strategic petroleum reserves, which most of the Western countries have done. All of that has mitigated the impact. You can model this. We've modeled it. I think a lot of people in the industry have muddled it. We're approaching unheard of inventory levels. I mean, really, really low levels. You can debate whether that's going to hit those really low levels in 2 weeks or 3 weeks. But once you get to that point, then you'll see price shot up -- I think dated Brent, most people will model would say dated Brent will shoot up. Once you get to that really low inventory level up to 150, 160 the models would tell you that. And then what happens is when the price gets to a certain level, demand destruction brings it back into balance. Prices go so high, it becomes unaffordable and that's what happens. And so we're at that level right now, and I think crude being in the sort of $90 to $110 for the last whatever it is, 6 weeks has really been mitigated by running down inventory. Can't last forever. So we'll see what happens. Predicting this and the exact timing, it's always a challenge, but that's the way we see the picture.

Yes. To be clear, you're talking about price signals, very high-priced signals coming in 2 to 3 weeks --

The order of magnitude.

Order of magnitude, and that is informed by a global crude oil and refined products trading organization, right. So you talk to that organization, basically talk to the knowledge base, which informs what you just said.

Historically, Exxon have not been in the trading business, but we built a trading organization over the last 5 years. So what you really see is we have the most -- the largest footprint in the oil and gas business around the world. We were pretty much in every country. We have assets, we have logistics, and it gives us tremendous insight. It doesn't just give us arbitrage -- it gives us insight on where vessels, where opportunities are. We've built that trading organization largely by bringing in experienced traders at the same time as training our own organization. So we have an extensive trading organization in Houston, in London and in Singapore. But those insights come from having the largest footprint in this industry around the world. I don't know, Bob, whether it's or 3 to 4 weeks. What I'm really saying is it's -- once you get to the minimum inventory levels and all-time low inventory levels, there's only one way to go. That's the situation.

Very clear, vaguely apocalyptic.

We know I'm a terrible predictor of price. So I'm not going to do that.

Move to LNG then right? So it's a similar scale of disruption coming into summer power demand, where it's generally the most needed. And again, [ Global LG], whether it's [ TTF or JACAM], they haven't really adjusted to similar. Are we going to see similar things there?

Well, I think it's probably more advanced going into this, I mean, there was an oversupply of crude oil coming into this disruption. There was arguably a larger overhang of LNG. A lot of new LNG production come the Gulf Coast of North America, that's mitigated a lot of it. In many of the markets, you can deconvert from gas and electricity generation to coal. And we've seen a lot of that happen, particularly in China, particularly Asia. So I think those are the mitigating situations. Of course, what you see today is the U.S. retains its $3 domestic gas price at Henry Hub, whereas Europe and Asia are in the $18, $20 type range.

And that brings me to the final least loved commodity. I'm looking for someone else that loves to talk about U.S. Henry Hub. You don't see any hope for U.S. Henry Hub.

The thing about domestic gas in North America, primarily in the Lower 48 in the U.S. It's a lot of it. Not only is there a lot of gas in this country, it's a very flat supply which means there's not a lot of differentiation between the lowest-cost barrel and the highest cost barrel. So there's a lot of it. And even if you produce more and the demand goes up, that supply curve doesn't change that much for time. The prices really get set in the different regional prices by logistics. So you can't lay pipe. I mean obviously, it's very difficult in the Northeast to lay a lot of pipe prices higher. California, it's -- but if you're in the Midwest, I mean at Henry Hub, [indiscernible] price is pretty very typical. Now how do you evacuate gas out of this country? Well, okay, you can convert it to LNG. And a lot of facilities have been built on the Gulf to export LNG around the world, but it takes time. We, with our partner, [ Katra ] Energy, have built an export terminal. We've just started up. Our first train is online. We shipped our first cargo recently. The reason we did it, it goes back 20 years. We actually invested in an import terminal for gas long before the opening up of the unconventional business. And that gave us economics, which were highly attractive because a lot of the capital has been already spent 15, 20 years ago, and it gave us vantage export facility.

Yes. The irony is that location was going to be a place for Qatari LNG to ultimately land in the -- now it is the current sole source of Qatar LNG exports from tech --

And it's large. It's 18 million tonne 3-train asset. First Trains online. The second train will be mechanically complete at the end of this year and a third train finished in the first half of next year. So that's a big capacity. A lot of capacity to come on in LNG around the world. I've been in this job for 8 years. I've been with the company for [ 42 ] years, I've always heard about this [ gluts ] of LNG supply that's coming on the market in 2 or 3 years' time. And what's happened historically is the market suit up pretty quickly, so you don't actually see it. Sometimes for reasons you never predicted exactly.

A question coming back a bit to the oil. A general question on the sector. How long does it take for oil to move from the wellhead to the final consumed product? And what are the current inventory levels along that value chain?

Well, it's a -- of course, it depends where you are. If you're an importer of crude oil, take Europe, take Northeast Asia, obviously, from the wellhead, it's going to take you 2 or 3 weeks to ship, never mind producer what's in inventory let's just say, the Middle East to get up to Japan, then there's a whole supply chain. People think of crude oil, the source of gasoline. Well, of course, it is. And people say, well, in crude oil goes to $150, gasoline price will be $9 in California, and that will be a serious issue. It's much, much more than that. Crude oil goes into virtually everything around us. Fertilizers, it comes from crude oil and gas, food prices, they would reflect the absence or the lack, plastics, everything you see in the world is plastics, delivery, Amazon, still a lot of trucks around the country are running on diesel. So the crude oil price impacts so many parts of society. In terms of inventory levels down that supply chain, of course, for every single component, every market that those barrels go into, I don't know the answer to that. What I do know is that the gasoline levels of -- sorry, the inventory levels of gasoline, the inventory levels of crude oil is pretty much in the public domain. You can plot it, you can see it and you can see down, pretty much down at 5-year lows.

And we also have a comparable question. China data is difficult to find. What have you seen in that country and how are they dealing with an energy crisis?

While the Chinese have been building steadily a strategic petroleum reserve for years, consistently building it, our data would suggest they haven't touched it very much during this crisis. They've managed to secure crude oil. They've managed to use commercial inventories within the country. That doesn't appear that they've touched that. And so sort of position to the rest of the world, you would argue, based on that data, they're in a very strong position. They have a very large petroleum, strategic petroleum reserve, which they've obviously planned and built for long time.

And then seesawing quickly back to Henry Hub. What impact would the increase in export capacity, LNG export capacity have on Henry Hub price. I think I know your answer.

Yes. Not a lot. I don't believe it will. I mean, because there's -- there's so much gas in this country, and it's easy to go and drill a well and put more gas in the market. So even though you got this big suction sound of all its new export capacity, there's plenty in the gas in this country to supply it. And again, we go back to the supply curve because the supply curve is flat, they just mean the price is unlikely to change. I think most predictions that you see from third parties suggest that price is going to gradually rise over the next 10 years. I think it's more likely to be driven again by regional differentials, regional differences based on logistics or lack of logistics.

So if we take that macro backdrop and start to think about strategy, I always like to ask the question as a former strategist, what won't ExxonMobil do? To me, strategy is what you won't do.

Well, is what we will not do. We're not going to deviate from the core capabilities of this corporation. We're a hydrogen carbon manipulator company. That's our business. I talked about our strength. Our strengths are understanding the subsurface. Our strengths are in executing major capital projects for lower costs than anyone else. Our strengths are in catalyst conversion. So leveraging those capabilities, the 4 capabilities I talked about are core to every part of this company. This is why we resisted getting into wind and solar for so many years. We don't have any capability in that space. We know about hydrocarbons. So we will not deviate from that. We will not deviate to chase volumes. I'm absolutely adamant about that. You can grow a business, but if you don't grow the value in a commodity business, every investment you make wants to be left inside the supply curve, the lowest in the industry. So we're not going to chase volumes, even though prices are very, very high. Now it takes a long time to bring new capacity online. We're absolutely focused on the lowest cost barrels. So as an example, in the upstream business, we have not made an investment since 2018 to 2019 above $35 cost of supply. And what does that mean? That means for the life of that asset, 30 or 40 years typical for an upstream asset, if the price was $35 Brent for the entire life of that project, we would still make a 10% return. That's what we put that ceiling on investments in the -- what it does is it forces our corporation to identify the most profitable barrels. Our Permian cost of supply is $30 or less now. And so we won't chase volume. We will absolutely leverage our capabilities. So maybe just one other because it comes to my mind. I mentioned that we've taken $15 billion of structural operating costs the business in the last 6 years. We have plans to take another $5 billion out by the end of the decade. People said to me, "Well, that's it. You must have taken all the fat out then." It's not correct. It's a commodity business. You have to drive costs out year after year after year. Structurally, it's not cut structurally engineered costs out. None of us know what the impact of AI is going to be. [indiscernible] I anticipate it's going to raise. It's going to find ways to take more costs out of the business. So I think those are the 3 areas I'd say, Bob. We're going to continue to leverage what we're good at. Our capabilities are our competitive advantages. We're not going to chase volume for volume's sake. We're going to continue to focus on the lowest cost barrels, the lowest cost performance in the industry, and that will continue.

So that segues into the upstream. 5-ish million barrels today. 5.5-ish million barrels by 2030 and you split those upstream barrels into 2 categories: advantage assets and maybe traditional. I don't know what -- I don't want to say disadvantaged non-advantaged. I don't know what you call the other. Today, those legacy assets might be a worth of $2 billion day 30, there'll be less than 2. So all of your growth is coming from advantaged assets. And that's Permian, [ Guyana ] and LNG. So let's start with the Permian. What is the -- and I really want to talk about your conviction in that growth rate, what you need to do to get there, you have focused on R&D and technology as a way to unlock barrels. So start with the easy stuff starting with how are you going to get there? Let's go down the technology path.

Yes. If you look at the industry and you certainly look at ExxonMobil in the Permian the efficiency improvements over the last 6 years have been extraordinary. I mean you can see that as an industry when you look at the number of rigs that are running in the Permian, they come down dramatically and yet the production has continued to go -- so we know exactly where we're going to drill. We have the resource in place. We have the plans in place. It's all about execution in terms of delivering will be 2.5 million barrels a day by 2030 in the Permian. We have the largest contiguous Tier 1. Tier 1 means the highest concentration of hydrocarbons, the highest quality resource in both basins. And that's really, really important. So we have the resource. The question is how do you deliver that resource? How do you get the resource to the surface in the most profitable matter. And I've said many, many times, Bob, this is a balance between resource recovery, capital efficiency and production. You can improve resource recovery with technology. We've talked about that a lot. You only recover, don't know, 6% to 8% of the hydrocarbons in the unconventional space. In other, you leave 90-plus percent in the ground. So the key is how do you get more out. And we spent 10 years in research in terms of how we get more resource recovery, how do we improve that? We're well on the way to improving that by 50%. We committed to do that by the end of the decade. We've said that we will double the resource recovery early in the 2030s. We're on track to do that. How are we doing it? Well, we are fracking. We're smatching that rock under the ground more effectively and cheaper than anyone else. In other words, the fracking, the more you smash the rock, the more space you have to recover crude oil. But it's not just about smashing yet. This is 1 to 2 miles below the surface of the ground. So you smash the rock, you've got 2 miles of rock trying to push back down to close those gaps. That's why you inject proppant and the industry in [indiscernible] sound to keep those minute channels open. The problem with sand is it's heavy. So if you put a frac and the frac goes 1,000 feet, the channel goes 1,000 feet under land, under the ground. The sand will only go partway up that frac because it's too heavy, it stops. So we're using lighter proppant. We're using lightweight coke from our own refinery. It has the same strength, but is much lighter. And it allows that proppant to go much further down the frac, keeping the frac open, giving us more recovery, 20% improvement in recovery through the technology that I talked about. So I think we have -- we've talked about 40 unique stackable technologies. And those technologies that we're pursuing and deploying in the field, the lightweight proppant I've just talked to is one of them. That's to recover more crude oil and to get an improvement in capital because you can recover a lot of crude oil, maybe you overcapitalize it, how it doesn't work. You can reduce, you can do the opposite, reduce your resource recovery, spread out the wells, get lower capital spend, improve the capital efficiency. It's getting that balance right. The key for Exxon is the differentiated performance. We have a performance. We have a set of technologies, which is giving us lower cost drilling and fracking than anyone else. The higher recovery than anybody else. And Bob, as you know, we've taken a unique position in the upstream industry by all these technologies we're deploying with patenting. Historically, in the upstream business, people don't patent their technology. We are patenting it, and we fully anticipate defending that, proprietary technology.

That's nice. That means at least external people will see those patent filings and so we'll start to get an idea of what you're doing. We've known about the [ Coke ] proppant. Longer laterals is another thing you've talked about. Care to tease us with any other technologies? Or should we wait for the filings?

Well, let's just -- let's talk about what you try and do. So in the Permian, there are multiple benches, layers of rock with different concentrations of hydrocarbons with different density of rock. And that changes that changes by each bench. It also changes by geography. And what's important here is you get the spacing between the wells correct. Because if you have the wells too far apart, you leave too much oil in the ground. If you have them too close, you spend too much capital. So how do you get that balance right? This is a good example of where AI is helping us. Because today, we have an army of engineers and geoscientists who are doing that mapping to lay out the next cube development plan, to get that balance right between capital efficiency and resource recovery. AI can do that. We're using AI to do that. We are using AI to -- you can put different frac strengths into the rock. You can flick harder, you can frac softer, you frac more, it's more expensive. You frac softer, the fracs large. But to get that balance right is really very important. So how you frac and the intensity of the frac, that's a lot of the technologies that we're putting in. You need to get that oil and gas to move. You've got these micro pools. The diameter of these channels only a grain of sand. And so you're trying to get this thick globe oil through all of that. You want to mobilize it. So surfactant, if you heard people talk surfactants targeted at each bench and at each geography to help the oil move is a critical part of what we're talking about. One final one. To get oil out of a reservoir, you need pressure. If you're in the Middle East and you drill a hole, there's a lot of pressure underground 2 miles underground, which forces the oil up. As you extract more oil, the pressure goes down in the reservoir and you can't get as much as not a pressure to push the oil out. So in the unconventional space, secondary and tertiary recovery is going to be really, really important. How do you repressurize the reservoir to extract more oil for the long term? It will never be economic unless you have large contiguous acreage. You just have a 2-mile block, I can assure you every economic as we have the largest contiguous acreage, we're putting a lot of technology into secondary and tertiary recovery. So there's your teasers.

I will take those. Excellent. Two more advantaged assets. It's funny. In past years, Guyana was about the most exciting thing out there. We'll move it behind the Permian. And we'll talk about it just briefly. It's almost been do, it's repeatedly to [indiscernible] success, right?

I like that. I mean I like the description.

Talk to Guyana.

Well, Guyana has been extraordinary. I think everybody understands that. I mean it's not just about finding the crude oil, it's about the execution capability. I mean, we're building the lowest-cost facilities in the deepwater, the industry has ever seen at the fastest pace that industries. We've got 4 facilities online for FPSOs. They're all running above their design capacity. We're producing them in the first quarter, I think 900,000 barrels a day versus a capacity of or something like that. So the extreme [indiscernible] we have 4 more in the pipeline. We'll bring 250,000 barrel a day bolt-on in the second half of this year. We will bring another one on in the second half of 2027. And our seventh and eighth boats will come online in '29 and '30. So we'll have a capacity of 1.7 million barrels a day by the end of 2030. [indiscernible] is a massive block and I think not only has it been successful, there remains a lot of potential. I think a lot of people are aware that 30% of the block is under force majeure because there's a [ board ] of dispute between Venezuela and Guy we anticipate, and I think the world anticipates that will get resolved here in the next 12 months. And we'll go on the lead of the Guyanese government, what we want to do with that. But obviously, there is potential there. We have signed up this year to take a sole position offshore South of Trinidad. I think this is pretty telling. And I think most people can understand what we're doing here. We see this geological play going up through Guyana and potentially going into [indiscernible], and we've secured all of that, which offers us exploration, potential exploration you never know until you drill but its potential. We have 8 FPSOs in the southeast of the Stabroek block. That's really, really critical for the next decade and beyond because it gives you this opportunity for really low-cost tiebacks. In other words, you got no more capital in the ground or limited capital and you can drill small pockets of oil that are relatively close run them back to those vessels. I mean the key here has been the execution. We use this principle of design one and build many. And that's what we're doing. And the execution of that from our projects organization has been exceptional. Maybe I'll just -- if you don't mind, just extend because I mentioned AI a moment ago. And I think AI is going to be pivotal in this industry. I mean, the Holy Grail in our industries, can you find more oil and gas? If you find it, it's the most economic. You have to buy it from somebody, you find it. And how do you use AI to find more oil and gas? We have the largest subsurface data set globally of any institution in the world. The key for AI is do you have the data set. And what you're looking for is to analyze all of that data to see if you can find similarities to find new opportunities. And the reason I raise it now, in Guyana, we have built an agent model, think of it that way, which if we give it the seismic data that we've run, I'm oversimplifying to make a point and we say, go find the crude oil, it can find all the crude oil that we've already found with a 90% success rate. That is pretty extraordinary. So you can feed it to all the information and all the discoveries that we've made improved, it can identify them just by feeding that seismic data. You've got to have the data set to be able to do that, but it offers obviously potential the future. One more on that point, Bob. We have analyzed the well data from 50,000 wells that have been drilled in the industry all over the world, 50,000. It would have taken us 15 years to do that analysis. We've done it in a matter of weeks. And again, you're looking for similarities that humans may have missed. It's identified 150 exploration worldwide. We don't know if they're going to be successful or not until you drill a hole, you can never be sure. But the potential of applying this technology, AI, not just to Guyana, but globally is something that I think it will be really, really important for this industry in the future.

Last question on this topic, it's fascinating. If you think about where the FPSOs sit today in [ Stabroek ] Block, they sit at the mouth of the [ Skorpion ] River. You drilled a well in the middle of the block ranger, that was a carbonate discovery, right, carbonates, coral reefs loves to stay away from sand systems. When you get to the western part, this is a geologist talking, western part of the block, you're getting into the [ Orinoco], which is actually a higher discharge system than the one you found these, and you've taken exploration across the mouth of did you do all that after AI? Or has AI helped that as you're starting to look at --

We've done all that analysis before the use of AI. And I think, again, I don't want to say we've -- we've reached the holy grail in AI and exploration, we certainly have not. But what I'm saying is we're making progress. And it's really important that we're making progress. And the key to progress in this is to have the data set. That's what's really earlier. Ranger is a carbonate structure. This is one of the discoveries in Guyana. It's very, very different from all the developments so far. We've got work to do there to see if we can get developed [indiscernible].

Third advantaged asset is LNG. We talked about the Strait of Hormuz. And we have a number of questions on macro that will hopefully get back to the very tail end with LNG disruptions, you have 2 unsanctioned LNG projects, one in Mozambique, one in Papua New Guinea, some Japanese Trade House talks about diversity of supply and security of supply. Talk to those projects, talk to the potential of FID this year and then maybe talk about the overall LNG portfolio.

Yes. Well, I just speak in Mozambique, enormous resource, very low-cost resource, challenging location. It's right on the board with [indiscernible] in the -- we have Block 4 and Area 4, and we're the operator of that. We plan to FID to sanction 18 million tonne development this year, and we're on track to do that this year. Very low cost because the reservoir is very large, close to the shore. Importantly, it's on the East Coast of Africa. So in terms of distribution and shipping, it allows you access to the Asian markets lower cost. Papua, of course, Papua New Guinea is already in the Southeast of Asia. And this is a -- it's a new reservoir and new development with our partner, Total, but we will be leveraging the existing liquefaction facility that we already have there. Again, our plan and we believe we will sanction that project this year. These are, I would argue, the most economic opportunities LNG around the world. We are in Qatari, we're the Qataris, they're big NFE. We have a relatively small position there. We have 25% of 1 train. There are 4 trains. So I guess we're 25% with 2 million tonnes. And obviously, they're getting close to completing that, and that will depend on how they can start up their activities. So that's what we have on the target. Both those projects, Mozambique and Papua, which are both very large mobile will not be online toward 2030. When I talk about growth beyond 2030, obviously, there are components in there. We also have the Golden Pass facility on the Gulf Coast of America. We're a 30% position again of 16 million to 18 million tonnes, which is coming online. What I like about our LNG portfolio we've established is we have positions all around the world. We're in Australia. We're in Papua New Guinea. We're in the Middle East, we're in the Gulf Coast, we'll be in Africa. And that allows you to optimize trade flows. It allows you to trade that really allows you to optimize [indiscernible] the world. So we like our position in LNG and those are big projects to go and execute in the next few years.

That's 3 advantaged assets. Is there anything in the portfolio that can move up to the big leagues that can move from a legacy --

You got to take the 2 million tons of what you said was less strategic -- I don't regard them as less strategic. It's just that the reason we talked about Guyana, Permian and LNG like that, that as a growth engine. Extremely low cost of supply, left inside the like with lots of potential. Just to give an illustration in the 2 million tonnes you talk about, it's not growing, but there's 155 depletion in our business every year. So to keep it flat, it means you've got to be growing something. We're in Upper [ Zakum ] with our partner, ADNOC, very, very attractive asset. We are growing that with our partner there. That's a key of our growth portfolio. We've been highly successful in mining. And we regard our [indiscernible] operation as the lowest cost mining operation in Canada. If you go up there.

Oil sands mining and ...

I apologize, oil sands. This is -- you mine sand, it's 10% crude oil, you've got to extract the crude oil from the sand, and that's the way of -- it's a hard way to make oil is the way I look it but it's really interesting if you go up there. These are massive trucks and massive scoops of taking these oil sands and take it to the processing facility, 100% autonomous. Well, it's not a single person writing those vehicles now all controlled again by AI. So we're growing that. We're growing our in city, which is a heavy oil business, a little different than mining in Canada. We see good growth potential there. So across the portfolio, we have other unconventional assets like the back end that we plan to continue growing. We have growth in Angola. We have growth opportunities in Nigeria. So within that 2 million tonnes, there's a lot of opportunity. 2 million [indiscernible].

And then that would suggest that things like inorganic opportunities growth would be unnecessary, but still part of your strategy. Talk about M&A and what role it plays in the portfolio.

I think the key to M&A is, can you acquire somebody and get 1 and 1 to equal 3. There's not pointing just buying somebody for the sake of buying somebody to get volume. You've got to have a deal space. You've got to have value. We bought [ Pioneer ], as you're well aware, and the key to that was the technology I talked about, the ability to recover more crude oil out of the rock and do it at a lower cost. Meant that, that resource that Pioneer had was worth this much to them it's worth a lot more to us and that creates deal space. We can obviously add a premium to Pioneer, and it creates tremendous value for us. That's the key with M&A. Can 1 and 1 equal 3? What I like about our position is because we have this growth portfolio, we don't have to do M&A. We don't have to. We have a growth portfolio already. And we like to describe ourselves as picky acquirers. We're not going to do it if the deal is right, but the key to the deal is to create deal space. What can we do, which adds more value to anyone that we acquire? That's the basis of Pioneer. So I would tell you, if you're in my job, you're looking at every company and every asset in the world on an ongoing basis. Of course, you are. The key is does the time -- is the time right, can we create that deal space? Is that [indiscernible]. So what I'd say, Bob, is, of course, you're in our business, you look for those opportunities, you're constantly assessing them. You're constantly reviewing them. Timing has to be right, and we'll see that plays out. So I've told you nothing about are we going to acquire anybody or not.

You've given me some boundary conditions. If we think about this year, mathematically, global crude prices this year are almost going to have to average [indiscernible] barrel or more, perhaps more. We know what your dividend payment is and how it grows historically. We know your plans for share buybacks. We know your CapEx plan. You haven't changed them this year, amidst this run up in price. And therefore, we or consensus would have something like $30 billion more cash flow coming to you at this part of the cycle. A good question would be how do you reallocate that $30 billion of [indiscernible] cash flow?

Well, first of all, let's go back to your price assumption. I don't know if the Strait of Hormuz opens tomorrow, price doesn't get up to this 150, but it is going to take time to rebalance the global markets for sure. The ships are all in the wrong locations. So it's going to take -- and you can estimate 4 to 6 weeks before we get into a normal supply chain. And it all depends on whether the straight opens at what time it opens. And then -- the question for the world in every country and every commercial organization is how quickly do you rebuild those inventories? And if you're nervous about this thing starting up again, you're going to rush. And so that's going to have more demand than we had going into this -- so that could keep the prices high. But I think there's a bunch of unknowns. I think logically, you would say there is going to be some pull on demand and there's going to be a lack of supply of periods of prices are going to be elevated which for a company like us could end up with the situation you're in. And first of all, I mean, we have optionality. We're going to build cash, of course, on the balance sheet. We're going to address debt, of course, we are. And then it will be a question for the Board around distributions. I like the fact that we have this continuous stable share buyback scheme. We've never had that historically company. I like the fact that we continuously raise the dividends year-on-year. Whether we feel there is an opportunity to do more than that, Bob, I think the key for us is generate the cash lower debt, put it on the balance sheet, let the Board of Directors decide. And that's a process yes.

So wait for an opportunity set. To -- on the opportunity side, I'll try to combine a couple of the questions as well. I had a question around Australian unconventionals and a question around Venezuela. What role will those 2 assets play in the portfolio?

We had a lot of publicity about ExxonMobil in Venezuela for recent weeks, because I always say be careful what you read in the media. We're assessing Venezuela with the support of the U.S. government. We have teams in Venezuela now. We've had teams in Venezuela. You have to assess technically what the state of the assets are. We're in discussions with the government of Venezuela in discussion with [indiscernible]. Yes, it's going to take time. We haven't been in Venezuela for gosh, 20 years. We've been expropriated twice. So but we're in there. It's a tremendous size -- it will take time to understand whether that's going to compete for capital in our portfolio, whether we can get agreement with the NOC and with the government of Venezuela. It's an opportunity set if you're as large as we are, Bob, you have to look at every opportunity around the world, and we're certainly doing that. I've forgotten your first question -- Australia unconventional. Key with -- on conventional rocks have got to be right. The fiscals are going to be. You get the right rocks in the right fiscals. In unconventional, you need a lot of open space because the key Australia has opened a lot of open space. drill, frac, drill, frac, drill, frac, but then you've got to get that product to the market. So Argentina has a lot of unconventional rock. Azerbaijan, Algeria, Australia, the key is what competes. Early days in Australia, there is certainly potential there, but it's quite a ways in land. So you've got to build a lot of pipe to get it to the open market and can that be economic? Can it compete in the global market? I would tell you, there isn't an opportunity around the world that we're not involved with, we're not addressing, we're not assessing, I would say, including Australia because if you're the size we are, it's a 15% depletion every single year, you have to be looking at everything. We're looking at Venezuela, we're looking at Australia, but really new yet.

It sounds like Algeria and Azerbaijan would be higher on your unconventional list in Australia?

Well, we've looked at them more, but again, very early days on all of them.

We've got less than 2 minutes left. Could you close out telling us what's the value proposition ultimately for owning ExxonMobil shares?

Yes. Well, I'll repeat a little bit of what I talked about at the start. The runway for this corporation is unmatched of anything that we've had in the last 40 years. We have the strongest, highest earnings and cash flow growth potential that in decades. It's taken a lot of effort to reengineer rewire the corporation to get that space. We laid out this plan to 2030, 18 months ago. Six months ago, we updated it. We added $5 billion cash flow growth and $5 billion earnings growth between now and the end of the decade. So at constant price, we will increase earnings by $25 billion between 2025 and 2030. And cash flow will increase by $35 billion. We added 5 million included in that 6 months ago without any increase capital expenditure, and that is due to technology. The key in this industry is can you differentiate performance versus everyone else. And I think the data suggests and it shows to you not only do we have a growth runway to grow cash flow and earnings through 2030. We're putting those foundational and blocks in place to make sure we [indiscernible] beyond that.

Perfect timing. With that, I want to thank Neil. I want to thank you in the audience. I encourage you to stay for [ Diamondback], followed by Chevron. And with that, let's thank Neil.