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Exxon expects to generate some $16 billion in profits from its fuels and chemicals businesses in 2027, company executives told media.
"Toward the end of this decade we see gasoline demand peaking, but it will be a long plateau," Senior Vice President Jack Williams said, as quoted by Reuters.
The increase in earnings follows the merger of Exxon’s refining and chemicals business and its streamlining in order to maximize returns from both divisions.
In line with these plans, Exxon announced the start-up of two new chemicals units at its Baytown, Texas, refinery earlier this week.
The addition cost the supermajor $2 billion and was part of its long-term growth plan.
With the startup of these two new lines, ExxonMobil is delivering high-value materials for a variety of products that society depends on every day,” said Karen McKee, president of the company’s Product Solutions division.
“We achieved excellent safety performance by leveraging our expertise to plan and execute large projects, while providing meaningful investment in the U.S. Gulf Coast,” McKee also said.
Exxon also expanded its Beaumont, Texas, refinery earlier this year, adding 250,000 barrels to its daily processing capacity.
Petrochemicals are widely seen as the only long-term growth path for oil and gas companies. The reason is, of course, the energy transition that many argue will decimate demand for oil as a transport fuel.
The International Energy Agency earlier this month forecast that oil demand will peak before 2030 as EVs displace internal combustion engines. OPEC disagreed, however, warning against such forecasts as they could endanger global energy security by discouraging investment in oil and gas production.
According to the Energy Information Administration, gasoline demand in the United States is already past its peak, which occurred in 2018, at a level of 9.33 million barrels daily. The latest available data, for June this year, shows demand of 9.27 million bpd.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com