Sabrina Valle

HOUSTON (Reuters). Exxon Mobil On Wednesday, (NYSE:), will inform Wall Street about its future spending plans. Investors are interested in how the company will manage oil and low-carbon projects without hurting shareholder returns.

In order to reduce costs, America’s largest oil producer cut back on large spending and increased investment in low carbon ventures. Analysts will have the opportunity to ask executives about their spending habits and propose new investments in biofuels and carbon capture.

Exxon’s failure to disclose expected returns targets is the main concern for shareholders, stated Ben Cook, portfolio manager at HennessyBP (NYSE: ) Energy Transition Fund which owns shares in Exxon. He said that the nearly 6% dividend yield was critical for investors.

Paul Cheng from Scotiabank said there was a quadruple increase in low carbon spending between 2027 and $15 billion. This raised the question “of which legacy projects are being pushed out” and “whether new low-carbon investments could yield comparable returns” as oil.

It will be the first update under a new board, which has three new members. The investors demanded that the company reduce spending, increase returns and address climate issues. Exxon is now a company that views climate change as a business opportunity, rather than questioning it.

Cheng explained that investors want to find out if Exxon will have to cut some oil-and gas projects in order for them increase their carbon capture spending and clean fuels. Cheng stated that low-carbon might “remain an obstacle to the company’s overall portfolio.”

SPENDING REBOUND

In a signal last month, the company said it would reduce its annual spending following pandemic-induced cutbacks and increase between $4 billion and 9 billion over the coming years. They also said they would continue to buy back shares in the next year.

The company has included future budgets for new investments in oil and gas in Guyana offshore, Brazil, U.S.shale and chemicals products. Proposed sales of billions in less-productive assets will offset the cost.

Exxon Guyana raised its oil reserves to 10 billion barrels. In 2027 Exxon’s projected production will rise eightfold, to 1,000,000 bpd. This is more than half of the company’s total output.

Exxon has approved another $8 billion deepwater project in Brazil, in which it holds a 40 percent stake. Exxon has now added two drilling rigs to the U.S. Permian basin, bringing its total number of nine in this top U.S. oil field.

The company pledged $30 billion to Mozambique’s liquefied Energy Project. They also promised to incorporate carbon capture technology into the efforts on Africa’s east coast.

Paul Sankey, an oil analyst at Sankey Research said that Exxon would either increase spending or add a ton more. His question, however, is how much and where it will spend its money in the near future.