Exxon moves HQ to Houston, combines businesses in major cost-cutting revamp

Oil giant Exxon Mobil has unveiled a sweeping restructuring of its global operations to cut costs, combining its refining and chemicals businesses into one, putting its energy transition business on the same footing as its other operations.

Effective April 1, Exxon will be organised along three business lines: its upstream oil and gas production unit, the combined downstream refining and chemicals business, and its energy transition business, called Low Carbon Solutions, Exxon said in a company filing on Monday.

The restructuring will result in the company combining its technology operations from several individual operations into a single organisation called ExxonMobil Technology and Engineering, Exxon said.

The company will also relocate its corporate headquarters from Irving, Texas, to its campus north of Houston, a move expected to be completed in 2023.

“Aligning our businesses along market-focused value chains and centralising 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,” Exxon CEO Darren Woods said in a statement.

Exxon pledged to cut US$6 billion from its operating costs by next year after suffering a historic US$22.4 billion loss in 2020. The restructuring is unlikely to impact fourth quarter financial results due later on Tuesday. Past cost-cutting moves and higher oil prices are expected to deliver a quarterly per share profit of US$1.93, up from an adjusted profit of three cents a share a year-ago, CNBC projected.

According to Exxon Senior Vice President Jack P. Williams, the current move marks an evolution for the company that has been in the works for a while. Putting its low carbon business on the same level as its two major businesses allows Exxon more flexibility to redirect investments as the company adjusts to the energy transition, Williams told Reuters.