HOUSTON -(Dow Jones)- Exxon Mobil Corp. (XOM) said Friday it plans spend a record $37 billion annually in capital projects for the foreseeable future, becoming the latest oil giant to unveil an eye-popping capital budget aimed at boosting production and reserves.
“The corporation anticipates an investment profile of about $37 billion per year for the next several years,” Exxon Mobil said in an annual report filed with the Securities and Exchange Commission. “The corporation’s financial strength enables it to make large, long-term capital expenditures.” The figure is slightly higher than the record $36.8 billion the Texas-based oil major invested in 2011 and a jump from the $32.2 billion it spent in 2010.
The announcement marks the rebirth of a trend towards bigger spending by the oil majors that was interrupted by the financial crisis, which caused oil prices to tumble in 2008.
A recovery in crude prices has led the majors to shrug off the uncertainty and keep boosting spending as they seek to fund the projects that will drive production growth and replenish reserves for decades.
But part of the increased spending comes from higher costs for equipment, materials and labor. These projects are getting increasingly expensive as companies push technological boundaries to tap reserves in hard-to-reach places such as the deep-water and the Arctic.
Rival Chevron Corp. (CVX) said in December it plans to spend $32.7 billion in capital projects this year, 12% more than in 2011, while ConocoPhillips (COP) said its 2012 budget of $14.8 billion will be 11% higher than in 2011.
Texas-based Exxon Mobil is the world’s largest publicly-traded oil company
-By Isabel Ordonez, Dow Jones Newswires