Vehicles pass in front of an Exxon service station in Bethesda, Maryland, U.S., November 25, 2024.
During the third-quarter earnings call on Friday, Woods said the company aims to strengthen its resilience by upgrading existing refineries and diversifying production while maintaining lower investment costs. “We’re looking at our existing facilities, finding opportunities where we can upgrade across and then provide high-value products,” said Matt Crocker, Exxon’s president of product solutions, in an interview last Wednesday. “As we look forward, I can see us doing more of those kinds of projects.”
Exxon’s refining segment reported a 41% year-on-year profit increase in the third quarter, reaching $1.8 billion due to improved refining margins. However, earnings from the chemicals segment fell 42% to $515 million compared with the previous year. Despite the decline, the company continues to advance several large-scale projects aimed at strengthening its product solutions business.
Among its latest developments, Exxon started new operations at its Singapore refinery in September, converting residue and fuel oil into base stocks. It also began producing renewable diesel at its Strathcona refinery in Canada and expanded low-sulfur diesel production at the Fawley refinery in the United Kingdom. Woods noted that ongoing projects at Exxon’s Baytown refining and chemical complex in Texas exemplify the company’s approach to achieving stable and competitive returns. “We have really good opportunities with that asset base. We’re pursuing them aggressively, and they come with very good returns and very resilient returns,” he said.
This year, Exxon targeted six projects under its product solutions division, which combines refining and chemical activities. Four have already begun operation, and the remaining two—focused on expanding advanced plastics recycling and producing more thermoset resin—are expected to start by the end of the year, according to Crocker.
The company also recently launched a new major petrochemical complex in China, contributing to global petrochemical capacity expansion. This increase in production has added pressure to industry margins worldwide. Nonetheless, Crocker said the company remains confident in the long-term market outlook: “There’s plenty of demand growth typically linked to gross domestic product, and that fundamental hasn’t changed.”
Analysts noted that Exxon’s integrated chemical operations provide cost advantages. Shruthi Vangipuram, senior research analyst for base chemicals at Wood Mackenzie, said Exxon’s chemical complex benefits from using lower-cost feedstocks such as propane and butane, compared with smaller traditional crackers in China that rely on higher-cost naphtha.
Exxon’s continued investment in refining and chemical upgrades underscores its strategy to enhance value creation, improve operational flexibility, and position itself for future growth in a competitive global energy market.
