Exxon Mobil CEO: Guyana will go down as one of the best deepwater developments in industry history

Exxon Mobil CEO: Guyana will go down as one of the best deepwater developments in industry history

Exon Mobile out with first quarter
results this morning the company earning
$26 a share for the first quarter that
was shy of the consensus estimate of 220
Revenue did beat expectations though at
$ 83.1 billion and uh joining us right
now for an exclusive interview is Darren
Woods he’s Exon Mobile’s chairman and
CEO and Darren welcome thank you for
being here today good morning Becky good
to be here so I why don’t you talk a
little bit about what happened during
the quarter the stock is off by about
1.4% um Revenue was stronger than
anticipated but the earnings per share
was below what the street was looking
for well if you look at the business and
our operations they delivered uh exactly
in line with our plan in fact in some
cases they
outperformed uh you can see that in our
cash flow from operations which exceeded
consensus by about a billion dollar the
the myths the street had for our
earnings are a function of some non-cash
tax and inventory adjustments which we
tend to see quarter on quarter
occasionally and they this this quarter
they happen to stack up but uh we feel
really good about the operations and
what the business is delivering one of
the highlights that you point out is the
gross production numbers that you’re
seeing now in Guyana 600,000 oil
equivalent barrels a day there I mean
that has turned out to be a hugely
important stake for you yeah it’s I
think a great example of uh the
capability of this organization and each
of the different sectors coming together
our technology company operations
company our projects company coming
together to make these things possible
we deliver these projects at an industry
leading Pace uh we deliver them ahead of
schedule below budget and when we bring
them on the operations team start
optimizing and we tend to reset what we
think is possible and very safely raise
the production to a point where we are
now running uh those three ships uh
those production units at a rate higher
than what we made the investment
decision on so extremely proud of that
of course we’ve got three more in the
works to feel really good about so this
is a tremendous uh example of what the
organization is capable of doing but the
the production that you’ve seen in
Guyana is I’m sure part of the reason
that you’re involved now in this
arbitration with with chevron chevron
wants to buy hes hes is a 30%
partnership in that deal with you you
guys have a 45% stake in it um what’s
the arbitration over and what do you
think’s likely to happen here so I think
great context uh for that discussion and
if you look at Guyana and the
development there I think it will go
down as one of the best deep water
developments in the history of the
industry so a lot of value that’s been
created through the hard work of the
partners but specifically with our
engineering organization and our
projects organization so understand uh
why chevron’s interested in
participating in such an attractive uh
development the the partnership that
exists today is is run or uh defined by
a joint operating agreement that
agreement gives existing Partners rights
when they’re are changes in controls um
the Chevron hess uh
transaction ignored those rights we’re
we’re standing up for the rights to make
sure we protect the value that we’ve
created there to make sure we understand
what the Guyana assets the value of
those assets are in the Chevron H
transaction and make sure that we have
line of sight to how best optimize value
for our shareholders I’m I’m sure you
understand chevron’s position I’m sure
they’ve explained it to you they they
are saying that there’s a h subsidiary
that won’t change and they think that
that is enough to satisfy what they are
calling a contract language dispute um
that they think is something that’s
routinely put in and usually is not
taken up by the other partners how is
this different how do you think it’ll
play out well I am familiar with their
argument in their interpretation we
wrote the Jaa uh so we have a pretty uh
clear line of sight as to the intent and
the circumstances that um apply and the
language that applies to these
circumstances so we feel pretty
confident in our interpretation and
frankly that’s the point of the
arbitration the joa allows for that it’s
understandable that Partners from time
to time can have a different
interpretation of that we’ll take it
through the arbitration process and
we’ll let the facts speak for themselves
would you put in a bid yourself if
arbitration allowed you to do that you
you guys are still caught up with
Pioneer Natural Resources trying to
digest that major acquisition would you
have the money to go ahead and try and
put a bid in for these assets as well I
I’ve made it clear in the past that you
know this is not a a play for H we’re
not interested in transaction on H this
is really around protecting the value
that we’ve created as part of that
development making sure that the
preemption rights that we believe exist
in the joa are recognized and confirmed
and then understand what the value
they’re putting on that asset is and
then what the options are to um maximize
the value to your shareholder so I what
does that mean d I’m sorry just to dig
into it does that mean you’re not
looking to buy Hess outright but you
would be looking to buy these assets or
you just want to be compensated and
maybe push for a higher deal for those
assets where you guys are comp
considered as well I think there are a
lot of options on the table Becky I’m
not limiting myself to anyone we’re
going to look and see what the cash
value of that first of all we’ll confirm
the rights of preemption and then we’ll
look to see what the cash value of this
asset is within that transaction and
then we’ll explore the opportunities uh
that are available to us Darren while
you’re here definitely want to talk to
you about what you’re seeing in the
demand for oil these days we we’ve
gotten a few concerning numbers that GDP
number that was below expectations
yesterday there was a lower than
expected manufact uring index number um
are you seeing any sort of a Slowdown
and and what do you see on the global
stage no I would tell you actually uh
the first quarter was stronger than
frankly we had anticipated um and so the
first quarter looks good as we look
forward through the rest of the year our
expectations is we’re going to see a
demand growth for oil uh probably hit
another record this year last year it
hit a record uh this year we expect it
to hit another record Transportation
fuel demand is is very healthy and in
fact if you look at the first quarter
refining margins that make petroleum
products from crude uh it was the second
highest uh first quarter margin we’ve
seen over the last 10 years so very uh
constructive first quarter for refining
we’re in a dip now as we head to the
transition to the summer driving season
so we’ll see how that picks up going in
nothing indicates that that’s coming off
the crude markets look um fairly well
supplied but but balanced uh natural gas
is a little long right now but I think
that’s a short-term issue the one Market
that we see some weakness in from a
margin standpoint is chemical and it’s
not a function of the demand and the
demand growth it’s a function of the
supply that’s coming on so frankly we
see a a relatively um positive outlook
for for the businesses that we’re in our
industry

Darren Woods, Exxon Mobil chairman and CEO, joins ‘Squawk Box’ to discuss the company’s quarterly earnings results, importance of the company’s Guyana assets, oil demand outlook, impact of geopolitical tensions on oil prices, and more.