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Exxon Mobil's (XOM) CEO Rex Tillerson Hosts Annual Shareholder Meeting (Transcrip... Page 6 of 25
other liquid fuels will remain the world's largest energy source even in the year 2040, meeting about one-third of the world's
energy demand. While conventional crude oil production will remain the most significant source of supply through 2040 more
of the world's demand will be met by emerging sources that only recently became available in significant quantities.
As you can see in the chart on the left, gains will be lead by deepwater production, which more than doubles to the year 2040.
We also expect to see meaningful growth from all sands and tie all resources. And natural gas liquids supply will also increase
as it benefits from techniques used to extract the unconventional shale gas. On the right, we see natural gas supply and
demand. About 65% of the growth in natural gas supply is expected from unconventional resources, which will account for
about one-third of global production in the year 2040. By 2040, we expect energy demand for the transportation sector to
increase more than 40%.
As shown on the chart, we expect a continuing shift of the transportation fuel mix toward diesel with gasoline demand
remaining flat to declining. In fact, we expect diesel will account to about 75% of the growth in liquid fuels for transportation.
This reflects in part high growth rates in developing countries as economic activity expands and fosters greater truck, rail and
marine transportation requirements. Natural gas will also contribute more significantly in the future to meet rising transportation
needs.
We expect global chemical demand to grow at a faster pace than GDP as people seek higher standards of living and purchase
more household and packaged goods manufactured with chemical products. We estimate two-thirds of chemical demand
growth will be in the Asia-Pacific as the region acquired chemical feed-stock products to manufacture goods for both domestic
and export markets. China alone is expected to represent over half of the global demand increase with its rapidly growing
middle class and its expanding purchasing power. Like no other commodity energy touches every aspect of modern live and
provides tremendous benefits to people everywhere. To sustain progress and further expand prosperity the world must
increase the availability of reliable and affordable energy supplies. While the scale and complexity of the energy challenge are
immense, practical and economically viable options to meet people's energy needs do continue to expand. Access to high
quality resources is critical as is our ability to develop supplies and ways that are secure and environmentally responsible.
In this regard, technology advances are a key enabler to both safe and effective development of traditional and emerging
energy sources. Substantial investments are required to meet growing demand, including the development and use of
advanced technologies that are expanding and diversifying energy supplies. Free markets supported by sound and reliable
public policies remain vital for future energy developments. This includes policies that promote free and open trade and which
encourage private sector investments by reducing regulatory and fiscal uncertainty. And over time, our industry must
effectively plan, develop and execute the technologically complex and capital intensive projects that provide the energy people
need.
So, we will turn now to some of our operating highlights. And this is one of my favorite pictures, hopefully you saw in the booth
upfront. It's just a gorgeous picture of the b Bakken area in North Dakota, where we are making a number of investments to
grow unconventional liquids production. So, let me cover key elements of our corporate strategy as well as the business and
operational update.
Exxon Mobil's strategy has been adopted to achieve our commitment to create long term shareholder value. As discussed
earlier, our relentless attention to operational excellence supports safe, reliable and efficient operations. Our diversified
balanced portfolio is a fundamental competitive advantage enabling us to manage a wider growth of chemical market and
geopolitical risk and maximize profitability through changing business cycles. Continuing to capture the benefits our integrating
business model, the complementary strings of each of our businesses allow us to maximize the value of molecules across the
entire supply chain. Our integration and global perspective enables us to pursue, select and advance the most attractive
business investment projects.
Continuing innovation in the pursuit of technology leadership across all business segments enables our expanding reach,
project execution and our operational capabilities. At the very heart of our success are the talented men and women of Exxon
Mobil and their drive to achieve premier business results. We must continue to attract, retain and develop outstanding
employees. Our long term approach to managing the company has positioned each of our businesses to be at the top at their
respective areas of competition enabling the delivery of superior returns to you our shareholders. Risk management is the core
of our business is there are elements of risk in virtually everything we do. We take a systematic approach to risk management,
guarded by comprehensive system known as the operations integrity management systems or in short OIMS.
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http://seekingalpha.com/article/2243043-exxon-mobils-xom-ceo-rex-tillerson-hosts-annual- 8/2/2016