2020 Annual Report

2020 Annual Report CONTENTS II To our shareholders IV Positioning for a lower-carbon energy future VI Energy for a growing population Scalable technology solutions VIII Providing energy and products for modern life IX Progressing advantaged investments X Creating value through our integrated businesses XII Upstream XIV Downstream XV Chemical XVI Board of Directors 1 Form 10-K 124 Stock performance graphs 125 Frequently used terms 126 Footnotes 127 Investor information ABOUT THE COVER Delivery of two modules to the Corpus Christi Chemical Project site in 2020. Each module weighed more than 17 million pounds, reached the height of a 17-story building, and was transported more than 5 miles over land. Cautionary Statement • Statements of future events or conditions in this report are forward-looking statements. Actual future results, including financial and operating performance; demand growth and mix; planned capital and cash operating expense reductions and efficiency improvements, and ability to meet or exceed announced reduction objectives; future reductions in emissions intensity and resulting reductions in absolute emissions; carbon capture results; resource recoveries; production rates; project plans, timing, costs, and capacities; drilling programs and improvements; and product sales and mix differ materially due to a number of factors including global or regional changes in oil, gas, or petrochemicals prices or other market or economic conditions affecting the oil, gas, and petrochemical industries; the severity, length and ultimate impact of COVID-19 on people and economies and the timing and pace of regional and global economic recovery; the ability to realize efficiencies within and across our business lines and to maintain cost reductions while protecting our competitive positioning; the impact of company actions to protect the health and safety of employees, vendors, customers, and communities; reservoir performance; the outcome and timing of exploration and development projects; timely completion of construction projects; war and other security disturbances, including shipping blockades or harassment; political factors including changes in local, national, or international policies affecting our business; changes in law or government regulation or policies, including trade sanctions, taxes, environmental regulations and policies to address climate change risks, the granting of necessary licenses and permits, and government actions to address the COVID-19 pandemic; the outcome of commercial negotiations; actions of competitors and commercial counterparties; actions of consumers including changes in demand preferences; the outcome of research efforts and the ability to bring new technology to commercial scale on a cost-competitive basis; the development and competitiveness of alternative energy and emission reduction technologies; unforeseen technical or operating difficulties; and other factors discussed here and in Item 1A. Risk Factors of our most recent Form 10-K. All forward-looking statements are based on management’s knowledge and reasonable expectations at the time of this report and we assume no duty to update these statements as of any future date. As used in this publication, the term “industry” refers to publicly traded international energy companies. The term “project” can refer to a variety of different activities and does not necessarily have the same meaning as in any government payment transparency reports. Unless otherwise specified, data shown is for 2020. Prior years’ data have been reclassified in certain cases to conform to the 2020 presentation basis. Unless otherwise stated, production rates, project capacities, and acreage values are gross. References to “emissions” refer to energy-related emissions. To the people on the front lines – the first responders, health care workers, employees and essential businesses – who are courageously helping all of us during the coronavirus pandemic. As a company with employees worldwide, we have a deep appreciation for what is needed to mobilize and assist people on a global scale. We have worked together to endure unprecedented challenges this year, and we will continue to provide the critical products and reliable energy that support our heroes on the front lines and our communities around the world. We are grateful to all who stepped up to help. THANK YOU I EXXONMOBIL 2020 ANNUAL REPORT | LETTER FROM THE CHAIRMAN TO OUR SHAREHOLDERS deliver the strongest returns. These include our high-performance chemical projects, refinery upgrades and, in the Upstream, our advantaged assets in Guyana, the Permian Basin, and Brazil. Our recent reorganizations along value chains enabled us to reduce operating costs and improve efficiencies to better position ourselves for the future. Structural changes during the year resulted in reduced cash operating expenses of $3 billion. These savings grow to $6 billion a year by 2023 compared to 2019.1 We also continued to make strong progress on our plans to mitigate climate risk and position the company for success in a lower-carbon energy future. We met emission-reduction goals for methane and flaring and established new plans that are projected to be consistent with the goals of the Paris Agreement.2 The past year was like no other in recent memory. Our forward plans are expected to reduce absolute The global pandemic took a tragic toll on people and Upstream greenhouse gas emissions by an estimated communities, while severely impacting businesses, 30 percent by 2025 compared to 2016, and by the end big and small. Yet, as is often the case, hardships bring of the decade, deliver industry-leading greenhouse gas out the best in people, as exemplified by the thousands performance and align our Upstream operations with of frontline workers, first responders and medical the World Bank’s initiative to eliminate routine flaring.3 professionals who are battling the virus. Other notable milestones in 2020 include: An exceptional commitment was also displayed • Our active Board refreshment program continued by thousands of ExxonMobil employees around with two new directors added by the end of January the world who responded to the pandemic by 2021, which brings to six the number of independent serving their communities. I’m proud of the way they directors added since 2015. In recent years the stepped up and made contributions to those in need company has pursued additional board expertise of our products, from hand sanitizer and specialty in climate science, asset and risk management, and products for protective equipment to fuel for relevant industry experience. The average tenure for first responders. Through extraordinary efforts, our directors is about six years, compared to an average we kept operations running 24/7 while achieving of about eight years for companies in the S&P 500. strong safety and reliability performance. • In Guyana, Liza Phase 2 and Payara developments The impact of the pandemic on our business was progressed, and we continued exploration success severe. As economies shut down, energy consumption with three new discoveries, increasing the recoverable collapsed. For the first time in memory, all of our resource estimate on the Stabroek Block to nearly businesses faced simultaneous lows. 9 billion oil-equivalent barrels. We adjusted our capital investment plans, • The Chemical business set a new record for reducing spending last year by more than 30 percent, polyethylene sales, reflecting demand growth and developed future plans more flexible to market for performance packaging and strong operating conditions and focused on priority areas that will performance. II “We look forward to playing an important role in the recovery and beyond – by providing energy and products that are critical to economic growth while minimizing environmental impacts. We support society’s aspiration of net-zero emissions by 2050 and its ambition to achieve a lower-carbon energy future.” • We maintained our position as a global leader in New technologies will be critically important in the future carbon capture and storage (CCS), increasing captured as the global economy and energy use recover. The carbon dioxide (CO2) to more than 120 million tonnes. market fundamentals underpinning our business remain This is well over twice the closest competitor and larger strong – growing populations and improved living than the next five competitors combined.4 standards will require more energy. The respected International Energy Agency projects that oil and gas More recently, we announced the creation of a new will comprise 46 percent of the global energy mix in business – ExxonMobil Low Carbon Solutions – to 2040 under their Paris Agreement-aligned Sustainable commercialize our extensive low-carbon technology Development Scenario.7 portfolio and help society achieve the climate goals outlined in the Paris Agreement. This new business We look forward to playing an important role in the builds on the work of our Carbon Capture and Storage recovery and beyond – by providing energy and products Venture established in 2018. that are critical to economic growth while minimizing environmental impacts. We support society’s aspiration The business will initially concentrate on CCS, advancing of net-zero emissions by 2050 and its ambition to achieve plans for over 20 opportunities around the world a lower-carbon energy future. to enable large-scale emission reductions. It will also leverage ExxonMobil’s significant experience in The events of the past

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