Streamlining Business Structure Exxon Mobil to Save 6-Billion-Dollars in Structural Costs by 2023
Exxon Mobil has plans to transform its business structure by combining its chemical and downstream companies and centralizing technology and engineering, and other support services. Under the new streamlined structure, the company will be organized along three business lines – Upstream Company, Product Solutions and Low Carbon Solutions which will help the firm to enhance integration, grow value and reduce costs.
Texas/USA – Exxon Mobil is further streamlining its business structure by combining chemical and downstream companies and centralizing technology and engineering, and other support services, to better support customers, enhance performance and grow value. “Our transformed business structure enables us to more fully leverage the corporation’s scale, integration, technology advantages, and the skills and capabilities of our talented workforce, to better serve our customers,” said Darren Woods, chairman and chief executive officer.
“Aligning our businesses along market-focused value chains and centralizing service delivery, provides the flexibility to ensure our most capable resources are applied to the highest corporate priorities and positions us to deliver greater shareholder returns.”
Effective April 1, the company will be organized along three business lines – Upstream Company, Product Solutions and Low Carbon Solutions. They will be supported by a single technology organization, Exxon Mobil Technology and Engineering, and other centralized service-delivery groups providing like capabilities, building on the successful consolidation of major projects across the corporation in 2019.
The move is a further evolution of the company’s business model and part of its strategy to build globally competitive businesses that lead industry in earnings and cash flow growth, operating performance and the energy transition.
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Exxon Mobil is on track to exceed 6 billion dollars in structural cost savings by 2023, compared to 2019, driven by savings from the new business structure and measures such as centralizing procurement, digital transformation of processes, and right-sizing programs that were announced in 2020.
The new Exxon Mobil Product Solutions Company will engineer, manufacture and deliver products needed by modern society at an industry-leading scale, serving multiple segments, products and markets. It will play a critical role in reducing greenhouse gas emissions and plastic waste by developing more sustainable products such as:
- Lower-emissions fuels to help decarbonize commercial transportation, including aviation and marine.
- Chemical performance products that enable customer emissions reductions in applications in the agriculture, health and renewable energy sectors.
- Next-generation lubricants and plastics that improve efficiency for traditional and electric vehicles.
- Certified circular polymers that bring new life to plastic waste through advanced recycling.
ExxonMobil Product Solutions will be the market leader in sales of polyethylene and other high-value chemical products and hold the No. 2 market position in aromatics, lubricants and fuel additives.
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Karen McKee, formerly president of Exxon Mobil Chemical Company has been appointed to lead Product Solutions.
Exxon Mobil Technology and Engineering will integrate technology activities, improving value delivery through centralized management of technical capabilities tightly linked to business priorities.
Priorities include developing new technologies to significantly lower the cost of scope 1, 2 and 3 emissions reductions; reducing greenhouse gas emissions at the asset level; increasing production yields and revenue; developing high-value differentiated products for customers; and improving advanced recycling of plastic waste.
Linda DuCharme, formerly president of Upstream Integrated Solutions and Upstream Business Development, has been appointed to lead Exxon Mobil Technology and Engineering Company. This change will also consolidate the Upstream into a single organization, Upstream Company, which will be led by Liam Mallon, formerly president of Upstream Oil and Gas Company.
To further collaboration and integration, the company said it will relocate its corporate headquarters from Irving, Texas, to its campus north of Houston. The move, which will be completed mid-year 2023, will enable closer teamwork to accelerate and increase value delivery through company-wide approaches.