By Sabrina Valle
HOUSTON (Reuters) -Exxon Mobil Corp on Wednesday said for the first time some of its oil and gas properties may face impairment due to climate change, according to a securities filing.
The largest U.S. oil company’s board will test assets for climate impairments “in the context of overall enterprise risk” during the annual asset review by its board of directors. “Certain assets could be at risk for impairment,” it said.
Earlier this year, Exxon’s 12-member board was overhauled with three new directors in a proxy battle that weighed heavily on the company’s failure to address climate change in the past. Hedge fund Engine No. 1 was successful in convincing enough shareholders a new board could improve performance and rethink the energy transition strategy.
Exxon did not immediately reply to a request for comment.
Directors will analyze factors including future energy supply, regulation, government policies and greenhouse gas
restrictions, the company said.
Until asset recoverability assessments “are complete, it is not practicable to reasonably estimate the existence or range of potential future impairments,” Exxon said.
In the securities filing, the producer said it “views climate change risks as a global issue that requires collaboration among governments, private companies, consumers and other stakeholders to create meaningful solutions.”
Exxon said on Friday it would increase spending to cut its carbon emissions to $15 billion between 2022 and 2027, the largest budget among U.S. majors, in what was seen as a first climate strategy change under the new board.
Exxon and other U.S. oil majors’ climate strategy relies developing from scratch new decarbonization technologies that are currently years away from becoming commercial, like carbon capture and hydrogen.
Top executives of the U.S. producers were grilled before Congress last month https://www.reuters.com/article/idCAKBN2HI1BD?edition-redirect=ca for their communication strategy on global warming. They were also questioned for focusing their business on oil and gas production, while European producers have started to shift away from fossil fuels towards renewable sources of energy like solar and wind power.
The top U.S. producers https://www.reuters.com/business/cop/investors-board-us-oil-majors-dismiss-wind-solar-projects-2021-10-27 have decided against investments in solar and wind power projects, with investors onboard.
(Reporting by Sabrina ValleEditing by Marguerita Choy)
