ExxonMobil will move its headquarters to Houston and elevate its green energy arm, in a sign that activist investors have begun to exert more influence over the storied petroleum producer.
The company annouced the move of its HQ from the Dallas suburb of Irving, Texas amid a larger restructuring. It will consolidate offices with existing offices in Houston and enable closer teamwork, according to a company statement.
“Closer collaboration and the new streamlined business model will enable the company to grow shareholder value and position ExxonMobil for success through the energy transition,” ExxonMobil CEO Darren Woods said in the release.
There is something quite symbolic about the move, considering ExxonMobil’s corporate culture and dedication to doing things its own way. It comes after activist investors won three seats on its board last spring, seeking that the company address an energy transition and boost returns.
There’s nothing symbolic about Houston itself, which has a long running rivalry with Dallas as the de-facto oil headquarters of the United States. This is oil country.
But perhaps there will be fewer emissions as employees go back and forth between the two Texas cities.
And the move itself, mentioned in the same breath as the energy transition, shows that the company is altering course in a symbolic way. It doesn’t sound like much, yet this stuff means a lot within corporate culture.
More practically, effective April 1, the company will be organized along three business lines – ExxonMobil Upstream Company, ExxonMobil Product Solutions and ExxonMobil Low Carbon Solutions. This elevates the low-carbon business to equal footing with other businesses.
Meanwhile, the new ExxonMobil Product Solutions Company will seek to reduce greenhouse gas emissions and plastic waste by developing more sustainable products, according to the company.
This includes lower-emissions fuels to help decarbonise commercial transportation, including aviation and marine; next-generation lubricants and plastics that improve efficiency for traditional and electric vehicles; and certified circular polymers that bring new life to plastic waste through advanced recycling.
ExxonMobil’s Technology and Engineering unit, which services the three business arms, will centralise management of technical capabilities in line with business priorities. These priorities include lowering the cost of scope 1, 2 and 3 emissions; reducing greenhouse gas emissions at the asset level; increasing production yields and revenue; developing high-value differentiated products for customers; and improving advanced recycling of plastic waste, according to the company.
This isn’t a huge change compared to other recent industry announcements. It’s nothing like bp’s commitment to a major reduction in oil production, or other European oil companies switch to utility-based models that double down on renewables, gas and power.
Yet it is a change in structure and headquarters. And for such a methodical company as ExxonMobil, it deserves note.