U.S. energy behemoth ExxonMobil Corporation (XOM) and Rosneft – Russia’s biggest oil producer – are steadily progressing towards the construction of an LNG plant in the Russian Far East. The duo has commenced a process for selecting a contractor for undertaking the design and engineering work of the project.
Over the period of 2013–2014, the duo plans to complete design work, including selection of a liquefaction technology and identification of major equipment requirements, to perform engineering surveys, develop Front End Engineering and Design (FEEDQ), Russian Proyekt documentation for the LNG plant, hydro-technical marine facilities, and a source gas pipeline.
Exxon Mobil’s focus on the construction of an LNG plant in the Russian Far East is a prudent move as offshore fields are located in far off areas, inaccessible to the Russian gas supply system. The LNG plant would allow the company to liquefy the natural gas for export markets.
Exxon Mobil is the world’s largest publicly traded oil company, engaged in oil and natural gas exploration and production, petroleum products refining and marketing, chemicals manufacture, and other energy-related businesses. Approximately 83% of Exxon Mobil’s earnings come from its operations outside the U.S.
Exxon Mobil is one of the world’s best-run integrated oil company given its track record of superior returns on the capital employed. The energy giant has long been a core holding for investors seeking a defensive name with continued dividend growth. Exxon Mobil is fairly active in its investment program. The company plans to spend about $185 billion over the next five years, up 29% from the last five-year period.
The capital expenditure covers as many as 21 important oil and gas projects currently under the anvil and are estimated to accumulate over 1 million net oil-equivalent barrels per day by 2016. It includes the Kearl Oil Sands development project in Canada, four in West Africa and Kashagan Phase 1 in Kazakhstan. Exxon is also engaged in a large liquefied natural gas project in Papua New Guinea, which is expected to begin deliveries in 2014. It will unearth more oil from the development of the Hebron oil field, offshore the Canadian province of Newfoundland and Labrador. The development will help in recovering over 700 million barrels of oil and the platform is expected to yield its first oil towards the end of 2017.
Exxon Mobil holds a Zacks Rank #3 (Hold). However, in the near term, stocks like Abraxas Petroleum Corp. (AXAS), Oiltanking Partners, L.P. (OILT), and Seacor Holdings Inc. (CKH) with Zacks Rank #1 (Strong Buy) are expected to outperform the market over the next few months.
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