In separate presentations to analysts in New York this week, the heads of energy giants, Exxon Mobil Corp. and Chevron Corp. mapped out their companies’ respective plans for future growth in the ever-evolving energy industry.

Exxon Mobil CEO Rex Tillerson said Wednesday the world’s energy needs will continue to grow and that the energy industry must continue to keep up with demand. “The world’s energy needs are expected to be nearly 50% greater by 2030 than they are today,” said Tillerson. “Our industry remains massive and very much a long-term, capital-intensive business. Projects require years to develop, cost billions of dollars to bring on stream, and they operate for decades.”

Tillerson said the company’s project inventory at year-end 2005 will develop 26 billion boe net to ExxonMobil, and the company expects to start up more than 20 new global projects in the next three years to produce even more energy to fuel vehicles, light and heat homes, and power businesses around the world.

Tillerson noted that ExxonMobil invested a record of nearly $18 billion into its businesses in 2005 and expects to up that amount to near $20 billion a year between 2007 and 2010. “Our investment strategy has remained consistent over the years,” he said. “It is not driven by short-term swings in commodity prices or earnings. We are long-term driven and patient, and we are not opportunity-constrained. Standing back from the annual spending patterns confirms the consistency of our approach as we have invested more than we have earned over the last 15 years.”

Focusing on the company’s technology initiatives, Tillerson said he believes ExxonMobil’s leadership continues to open doors to resource opportunities through cost-effective solutions for challenging environments and for frontier resources such as oil sands, tight gas and extra-heavy oil. “In 2005, we spent more than $700 million,” he said. “Our five-year average (from 2000 thru 2004) exceeds $600 million per year.”

Tillerson emphasized the company continues to believe return on capital employed (ROCE) is the best overall measure of financial performance, adding that ExxonMobil led the industry in that category for 2005 with ROCE of 31%. “I would be cautious of anyone who tries to deemphasize it,” said Tillerson. “Some seem to have focused on other metrics to guide what they view to be in the best interest of their shareholders. As I think is evident by the results of this past year, their approaches such as buying or growing volumes simply for the sake of increasing volumes does not produce superior returns.”

Chevron CEO David O’Reilly outlined for analysts a five-year plan for the company’s sustained growth, which included updating its progress on a number of major oil and natural gas development projects.

“2005 was a momentous year,” said O’Reilly. “Through a disciplined approach, we have built very strong and integrated positions in growth areas of the world. We’ve converted those positions into tangible production growth, and we’re creating a platform for sustained performance going forward.”

O’Reilly emphasized that Chevron has changed dramatically since 1998, with the capacity of producing approximately 2.7 million boe/d.The company has tripled in size and has become more balanced geographically. He pointed out that in 1998, almost half of Chevron’s production was in North America, but currently North America accounts for less than 30%, with about 25% now in the Asia-Pacific region. “Over this period, our production has grown by two-thirds and our proved reserves have about doubled,” O’Reilly said.

Looking ahead, the company forecasts oil and natural gas production to grow by more than 3% per year over the next five years, with O’Reilly noting that Chevron’s exploration program has added over 4 billion barrels of resources in the past four years.

“Our success is predicated on our core business strategies,” he said. “We are focused on three things: growing upstream profitability in core areas and building new legacy positions, commercializing our equity natural gas resource base, and improving downstream returns in markets with the best fundamentals.”

John Gass, corporate vice president responsible for Chevron’s gas business, explained to analysts the company’s strategies to develop its resource base through liquefied natural gas (LNG) and gas-to-liquids (GTL) projects.

“The LNG element of our gas strategy is gaining momentum. In just the past year, we’ve made significant progress,” Gass said. In addition to entering a number of agreements on the supply side, Chevron secured 1 Bcf/d of capacity at the Sabine Pass terminal in Louisiana and filed permits with the Federal Energy Regulatory Commission for the Casotte Landing terminal to be located near the company’s Pascagoula, MS refinery.

“We are also making significant progress in building a global gas-to-liquids business,” added Gass. “GTL’s time has come. The technology is viable, and the economics for GTL have dramatically improved.” Chevron recently broke ground in Nigeria on a world-scale GTL plant scheduled to come online in 2009.

©Copyright 2006Intelligence 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.