* 2013 spending seen at $41 bln, mostly on exploration,
* Annual oil and gas output seen up 2-3 pct through 2017
* Shares edge lower
NEW YORK, March 6 Exxon Mobil Corp said
on Wednesday its oil and natural gas production would fall about
1 percent in 2013, but growth will return as more major projects
are started over the next five years.
The world's largest oil companies have struggled to increase
oil and gas output, forcing them to invest record amounts of
capital to tap into difficult-to-reach fields. Those big
investments do not yield immediate growth, forcing the companies
to focus on wringing the most from every dollar by improving
operations through efficiency or technology.
This year, Exxon said it expects to spend $41 billion, a
figure that includes its $3 billion purchase of Celtic
Exploration. The bulk of that budget is earmarked for
exploration and production, the company said.
"I never would have dreamed we'd be spending at this level,"
Exxon Chief Executive Officer Rex Tillerson told the company's
annual analyst meeting in New York.
Projects including the company's 110,000-barrel-per-day
Kearl oil sands development and its liquefied natural gas
operations in Papua New Guinea are expected to boost oil and gas
volumes in coming years for the world's largest publicly traded
Through 2017, Exxon expects its annual oil and gas output to
rise 2 percent to 3 percent. Last year, Exxon's oil and gas
production fell 6 percent to average 4.2 million barrels of oil
equivalent (boe) per day.
Phil Weiss, oil analyst at Argus, said the company's output
forecasts were largely in line with investor expectations.
Exxon's output of higher-priced liquids such as crude oil is
expected to grow 2 percent this year. Natural gas production is
forecast to fall about 5 percent in 2013, primarily due to
lower-than-anticipated output in North America, Tillerson said.
Exxon is also looking for speedier production growth in
North America, where it continues to increase investment in
unconventional resources like the Bakken formation in North
Dakota and the Woodford Ardmore shale in Oklahoma.
Exxon believes the Woodford Ardmore potentially holds more
than 1.5 billion barrels of oil equivalent, more than double the
oil company's prior estimate.
Tillerson declined to provide much detail about Exxon's
disputed drilling plans in Iraqi Kurdistan, but said the company
would like to be "engaged" throughout Iraq, a message that has
been communicated to the central government in Baghdad.
Since it signed for six oil blocks with Kurdistan last year,
Exxon has been at the center of the growing disagreement between
Baghdad and Kurdistan that threatens to fracture the OPEC
member's uneasy federal union a year after U.S. troops left.
Baghdad's central government is "very pleased" with the work
Exxon has done in the West Qurna 1 field, the executive said.
"We want to continue that engagement," Tillerson told
Shares of Irving, Texas-based Exxon fell 26 cents to $89.35
in afternoon New York Stock Exchange trading.