Natural gas, particularly unconventional resources, will continue to be a major focus for ExxonMobil Corp. in the coming decades, CEO Rex Tillerson told shareholders at the company’s annual meeting in Dallas last week.

The company’s diverse portfolio is concentrated in the Americas, where ExxonMobil has 57% of its resources. By resource base, conventional oil and gas still account for the majority at 41%, but unconventionals now account for 22% and continue to grow, he said.

In an energy outlook report issued by the company last December (see NGI, Dec. 12, 2011), natural gas was projected to grow by about 60% between 2010 and 2040, a forecast that Tillerson said remains viable and a big reason for the decision to scoop up as much gas-rich unconventional acreage in North America as it has in the past few years.

Low natural gas prices are “a transient condition,” said the CEO. Based on ExxonMobil’s long-term forecast for natural gas, “we’re really happy with the position we have,” now estimated at around 10 million acres.

ExxonMobil’s $40 billion deal in 2009 to acquire XTO Energy Inc. gave the company its title as No. 1 natural gas producer in the United States and Tillerson said of that purchase, the company has “no regrets.” Gas demand will grow and is growing, he said, mostly around power generation and industrial use. Transportation fuel growth won’t be dramatic for the private sector, but he is seeing some potential in commercial fleets.

ExxonMobil also has around 9% of its worldwide holdings in liquefied natural gas (LNG) — an area also likely to grow in North America.

“We’re studying the possibilities of exporting natural gas from North America, from both the U.S. and Canada, because of the abundant supply that has now been confirmed in North America,” Tillerson told the audience. Golden Pass LNG Terminal LLC, owned jointly by Qatar Petroleum International, ExxonMobil and ConocoPhillips, last year was given federal approval to begin service for phase two of its import terminal operations in Sabine Pass, TX (see NGI, May 16, 2011). Investor relations chief David Rosenthal said in April the company was exploring all avenues to ramp up gas demand, including LNG exports (see NGI, April 30).

Buying more property in North America is still on the table, but it’s more liquids-rich land because of oil prices. The same is true of global purchases, said Tillerson. ExxonMobil also is well positioned for more oil growth, with around 22% of its total resources in heavy oil/oilsands, most of it in Canada, and 6% of its total global resources in the deepwater.

“We are in strong operational and financial shape and well positioned to participate in unprecedented levels of investment in energy production in the coming decades,” Tillerson said. The company’s “competitive advantages” include a balanced portfolio and increased technology investments.

“These competitive advantages, combined with dedicated corporate citizenship, position the company well for the future,” he said.

The CEO took some time to defend the Irving, TX-based major’s efforts to reduce environmental impacts, noting that the company spent close to $5 billion last year on environmentally related expenditures. For the past five years the company has spent about $1.5 billion to improve energy efficiency and reduce greenhouse gas (GHG) emissions. Among other things ExxonMobil is on track to meet a 10-year goal set in 2002 to reduce energy use across facilities by 10%.

Most of the shareholders appeared to agree with the company’s progress, rejecting all six shareholder initiatives on this year’s proxy ballot, including a proposal to adopt goals to reduce total GHG emissions; for the board to be chaired by an independent member; for director nominees to be elected by a majority of shareholders; and for the company to explicitly prohibit discrimination based on sexual orientation and gender identity.

For the third year in a row shareholders at ExxonMobil and Chevron Corp., which held its annual meeting also last week, rejected shareholder proposals to require the corporation to prepare a report on the risks associated with hydraulic fracturing (fracking).

The ExxonMobil measure was rejected by 70.4% of those voting, despite impassioned statements by several audience members at the company’s annual meeting (see related story). There also had been a recommendation in favor of the proposal by influential proxy advisory firm Institutional Shareholder Services Inc. ExxonMobil earlier this year attempted to block the resolution, a request that was rejected by the Securities and Exchange Commission (see NGI, March 12).

ExxonMobil’s results were roughly in line with the vote last year, which was defeated by 71.75% of those voting (see NGI, May 30, 2011).

At the Chevron annual meeting, 27% affirmed a shareholder resolution calling for more disclosure on fracking risks to operations and finances. Last year a similar measure had garnered 40% support.

©Copyright 2012Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.