HOUSTON - Exxon Mobil Corp’s low carbon business has the potential to generate hundreds of billions of dollars in revenue and outperform the company’s traditional oil and gas as soon as a decade from now, chief executive Darren Woods said.

The largest US oil producer on Tuesday laid out to investors the aims of its emerging energy transition strategy in a meeting with Wall Street.

Exxon is tackling what should be a multi-trillion-dollar market in 10 years or more, Mr Woods said.

The result will be an Exxon less prone to commodity price swings through predictable, long-term contracts with customers striving to reduce their own carbon footprint.

“This business is going to look quite a bit different than the base business of Exxon Mobil,” vowed Mr Dan Ammann, president of Exxon’s two-year-old low carbon business solutions unit. “It is going to have a much more stable, or less cyclical, profile.”

How quickly that vision becomes a reality will depend on regulatory and policy support for carbon pricing – something the United States has not broadly accepted – and the cost to abate greenhouse gas emissions, among other changes, he said.

Mr Ammann declined to comment on whether expectations for rising oil prices underpin the strategy.

The company on Tuesday put out parameters for how it sees that growth unfolding, with carbon priced as much as three times current levels.

Exxon is one of the most oil- and gas-focused companies among Western oil producers, a strategy that delivered record profits for its investors in 2022 as fossil fuel prices soared.

Unlike its peers, Exxon has stayed away from renewable energy like solar and wind. Its energy transition plans lean heavily on reducing carbon emissions from its own operations, which Exxon is spending US$10 billion (S$13.3 billion) by 2027 to implement.

Exxon is tackling carbon capture, hydrogen and biofuels, which it estimates have a combined potential of US$6.5 trillion by 2050, equivalent to the traditional oil and gas business.

The company on Tuesday disclosed that it has signed a long-term agreement with chemical company Linde, adding a new client to its portfolio of companies willing to pay to decarbonise their operations.

It expects to sign contracts that should generate billions of dollars in revenue annually in the next five years, under current conditions.

Mr Ammann said the business can achieve “robust double-digit returns” off these long-term contracts.

In five years or more, depending on carbon pricing and regulatory conditions, the market could be worth tens of billions of dollars in annual revenues, the company said in a presentation. REUTERS