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Exxon Mobil Will Merge Its Refining and Chemical Businesses As Cost Pressures Mount

Exxon Mobil Will Merge Its Refining and Chemical Businesses As Cost Pressures Mount

Exxon Mobil Will Merge Its Refining and Chemical Businesses As Cost Pressures Mount

  • 03-Feb-2022 1:49 PM
  • Journalist: Henry Locke

Exxon Mobil Corp. announced major modifications on Monday i.e., 31st January, integrating its chemicals and refining divisions under one roof, relocating its headquarters from suburban Dallas to Houston, and putting its energy transformation businesses on the same footing as the rest of the operations.

The goal of this merger is to cut operating expenses. Exxon has pledged to save USD 6 billion from its operational expenses by the end of the year, following a historic loss of USD22.4 billion in 2020. The comprehensive restructure is the company's latest cost-cutting attempt after activist investors wanting to increase profits and confront the energy transition that gained three seats on its board last spring.

Development and ultimately oil and natural gas prices, as well as higher refining and chemical margins, were responsible for the good quarterly earnings. Due to the widespread distribution of coronavirus vaccinations, the figures show a considerable increase in gasoline demand compared to previous year. Exxon Mobil Corporation's fourth-quarter 2021 earnings were USD 2.05 per share.

The corporation will also streamline around three primary business lines: upstream, which produces oil and natural gas; product solutions, which manufactures fuels and chemicals; and downstream, which sells oil and natural gas. Exxon announced in a statement on Monday that the oil giant's senior executives, who have worked out of Irving's iconic "God Pod" office park for more than three decades, will relocate some 230 miles to the southeast by mid-2023.

There will be no employment cutbacks because of this merger. On Monday, Exon Mobil futures increased roughly 1% to USD 75.96. According to ChemAnalyst, closer collaboration and the new simplified business model will allow the corporation to increase shareholder value and prepare ExxonMobil for success in the energy transition.

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