NEW YORK (AP) — Exxon said Thursday that it will spend about $150 billion over the next five years to find more oil and natural gas to meet an expected increase in global energy demand.
In a statement issued ahead of a presentation at the New York Stock Exchange, CEO Rex Tillerson said huge investments are needed to expand the supply of traditional fuels like oil and gas while also advancing new energy sources. Exxon, the world's largest publicly traded energy company, expects global energy demand to increase 30 percent by 2040, compared with 2010 levels.
Including investments in its refining and chemicals business, Exxon will boost its capital budget by 29 percent from 2012 to 2016 to $185 billion, or about $37 billion a year.
Exxon Mobil Corp., Chevron Corp., BP and Royal Dutch Shell all produced less crude last year than in the prior year. They're struggling to tap new sources of oil fast enough in an environment where big finds are rarer and costlier to exploit. Potential fields lie deep under the seabed, or in shale rock formations that require expensive technology to crack open. When Exxon can't find oil fast enough, it is stuck with existing fields where production is declining.
Exxon is investing more of its money in producing natural gas, which the company believes will replace coal as the second-most popular fuel by 2025. The company spent more than $30 billion in 2010 to acquire XTO Energy and become the largest natural gas producer in the U.S.
Its natural gas bet so far hasn't paid off. Prices have plummeted this year following a production boom in North America and weak winter heating demand. Natural gas futures hit a 10-year low of $2.302 per 1,000 cubic feet on Wednesday.
Competitors such as Chesapeake Energy Corp. and ConocoPhillips have cut back on natural gas production this year in an effort to reduce a national surplus, but Exxon says it will keep its gas wells in operation.
High oil prices have supported Exxon's financial performance. Exxon's net income rose almost 35 percent in 2011.
Exxon shares fell 71 cents in morning trading Thursday, to $85.11.