* Pvs guidance had been $33 bln to $37 bln a year
* Chevron expects capex of $32.7 bln in 2012
(Adds well stats, fund manager comment, background)
By Braden Reddall
Feb 24 Exxon Mobil Corp, the
world's largest publicly traded oil company, now expects to
invest $37 billion annually over the next several years, coming
in at the top of a previous range and in line with an industry
trend toward robust spending.
The new guidance in Exxon's annual report, issued on Friday,
compares with the previous capital expenditure range of $33
billion to $37 billion. Actual capital and exploration
expenditure in 2011 was $36.8 billion.
"The corporation anticipates an investment profile of about
$37 billion per year for the next several years," Exxon said.
"Actual spending could vary depending on the progress of
Smaller rival Chevron Corp set the tone for the
large oil companies in December when it increased its capital
budget to $32.7 billion, after its 2011 spending of $29.1
billion came in $3 billion over budget.
Royal Dutch Shell Plc also increased its capital
budget to as much as $33 billion this year.
Indicators of cost inflation in the energy business were
easy to spot this week, with deepwater driller Ensco Plc
predicting a 9 percent average offshore labor cost increase this
year and engineering group KBR Inc warning of worker
shortages in Australia.
Exxon, Shell and Chevron all have large natural gas projects
in development in Australia, as well as ambitious plans for
"Finding oil is going to become a more costly enterprise,"
said Michael Yoshikami of YCMNET Advisors, a Walnut Creek,
California-based fund that owns Exxon and Chevron shares.
"They're making a bet on higher long-term oil prices."
And that looks like a fairly safe bet in the next few years,
he added, barring an unlikely global recession.
Not having to worry about short-term fluctuations is where
the world's largest oil companies have an advantage, given their
"Due to its financial strength, debt capacity and diverse
portfolio of opportunities," Exxon said, "the risk associated
with failure or delay of any single project would not have a
significant impact on the corporation's liquidity or ability to
generate sufficient cash flows for operations and its fixed
But the 2011 well statistics in Exxon's annual report
offered a glimpse of the challenges involved in finding new
resources. The total number of productive exploratory wells fell
to 23 from 35 in 2010, while the dry wells figure rose to 11
from 7 the year before.
(Reporting by Braden Reddall in San Francisco; Editing by
Bernard Orr and Tim Dobbyn)