Sabrina Valle

HOUSTON (Reuters). Exxon Mobil Corp (NYSE 🙂 announced Monday a massive restructuring of its global operations. This will include the merger of refining and chemicals business and will place Corp’s energy transition business on par with other businesses.

This is Exxon’s latest effort to reduce costs after activist investors who sought to increase returns and tackle the energy transition gained three board seats last spring. Exxon pledged to trim $6 billion in operating costs next year, after suffering an historic $22.4 million loss in 2020.

Exxon Senior Vice President Jack P. Williams explained that the changes were initially considered in 2017. Exxon’s fuels and oils division was merged with its supply and refinement around that time.

Williams said, “It is an evolution.” Williams said, “We’ve been working on this for quite some time.”

Williams stated that Exxon will have more options to redirect investment as it adjusts to energy transition by putting its low-carbon business on the same level with its two other businesses.

NO JOB CUTTING ANTICIPATED

Fourth quarter financial results will not be affected by the restructuring, as reported Tuesday by top U.S. producers. According to spokesperson Erin McGrath, Exxon doesn’t anticipate any job cuts as a consequence of restructuring.

Exxon Mobil Upstream Integrated Solutions and Upstream Business Development president Linda DuCharme has been appointed as the head of Exxon Technology and Engineering, according to company.

Karen McKee (ex-president of Exxon Chemical) will be heading the Exxon Mobil Production Solutions combined petrochemicals unit.

Exxon’s Upstream (or oil and gas production units) will be combined into one organization called Exxon Mobil Upstream Company, which is led by Liam Mallon. Mallon was previously president of Upstream Oil and Gas.

“Aligning our businesses along market-focused value chains and centralizing service delivery, provides the flexibility to ensure our most capable resources are applied to the highest corporate priorities and positions us to deliver greater shareholder returns,” Chief Executive Officer Darren Woods said.

PROFIT REBOUND

Exxon announced in a filing that it will organize its business along three lines effective April 1. These are its upstream oil production unit, its combined downstream refinery and chemicals business and its latest energy transformation business called Low Carbon Solutions.

The combination of past cost cutting moves and rising oil prices is expected to result in a quarterly per-share profit of $1.93. This compares with an adjusted profit for the same period of 3 cents per share.

It will consolidate its technology operations that were previously assigned to individual units. Exxon announced that the new technology organisation will be known as Exxon Mobil Technology and Engineering.

Exxon plans to move its corporate headquarters, which is currently located in Irving, Texas, from its Houston campus. The move will be complete in the middle of 2023.