XOM
#Yes, so in terms of the earnings impact from our asset sales in the second quarter, it was about $490 million.
A majority of that, <UNK>, was in the chemical business.
In terms of Kearl, in total as I said, is producing about 130,000 or in the second quarter it was producing about 130,000 barrels per day.
The phase 1 or the initial development was around 100,000 barrels, and phase 2 was around 30,000 barrels.
On Kearl.
No, I don't have anything to share at this point.
Yes, <UNK>, that was similar to an earlier question.
As I said earlier, I would just say that we keep alert to where we've got value propositions.
And the way I clarify that is bolt-on acquisitions that have natural synergies with our business, long-life assets that we think that our expertise and operating experience will bring intrinsic value associated with it, it's not focused on a specific resource type, but it's really focused on where we think that our unique experiences can add value, that others can't see.
<UNK>, I don't really have much to add on there.
That's really a function of the transactions.
Certainly, staying in a lower price environment is going to encourage both buyers and sellers to find closure.
Yes, well, as I said, we're certainly very encouraged by the first well.
It is one well in a very, very large block.
We are currently evaluating that well, and we're laying out, if you will, the plans moving forward.
You can expect the intent for us to not only to further appraise the discovery, but pursue other opportunities on the block.
I want to be clear though, that we follow all the laws within the host countries and international law, that we're operating on this block under license from the government of <UNK>ana.
And the border matters are really a function, or should stay with the governments to address through appropriate channels.
Yes, obviously our objective is to make sure that we're capturing all those opportunities, both structural and market out there.
And at the same time, ensuring that we maintain the high integrity of our operations.
I think, <UNK>, the ultimate measure here is our industry-leading unit cost performance, that we've seen over the last several years.
And while it's still early, I don't want to go too far with this, we are seeing the unit cost on a downward trend year to date, almost 9% down from where we were last year.
But that's about as far as I'll quantify at this point.
Obviously, this is a key element to ensuring that we remain a leader in unit profitability as well.
Sure.
Broadly speaking, as you know, LNG is a key component of our portfolio, and it's an important part of our margin generation.
As I said earlier, we've got a very good inventory, and included in that inventory is a number of LNG projects, and it's all based on our assessment, as I indicated, that gas will grow by about 1.6% per year between now and 2040, and more specifically, LNG demand will triple from 2010 to 2040.
So that is the value proposition we're pursuing, we've got a number of projects moving forward concurrently.
We're going to be very selective in what we'll invest in.
To your question about what does it take to make sure it goes forward, it's all the things you mentioned.
It's making sure we got a competitive cost structure, that we've got stable, transparent fiscal terms to underpin a very capital intensive investment, and that's why we're progressing several of them at the same time.
I would tell you that the brownfield type expansions are probably going to be the lowest cost LNG add.
By way of example, our Papua New Guinea project, just a phenomenal outcome, started up ahead of schedule, very, very good reliability.
Very well positioned to compete in an expansion, should we identify a sufficient resource.
Having the assets that we have in the US positions us very well.
Alaska, West Coast of Canada continue to progress.
Those opportunities will require more of what we were talking about, in terms of cost, in terms of fiscal terms.
Regulatory environment.
So in short, what I'd say, <UNK>, is that the demand projections there, we've got the ---+ obviously we've got the capability to participate in that, and we're very well positioned, with a very good inventory of high-quality opportunities, to meet that demand growth.
Yes, so just again, taking a portfolio look, <UNK>, we regularly evaluate our assets, our various business lines, for where we can grow earnings or optimize the long-term value of it.
And in the downstream business, it's focused in the following areas: expanding our logistics, expanding our feed stock, reducing our overall cost structure, and importantly, increasing high-value product yields.
You'll see that those ---+ one of those areas, or one or more of those areas, will underpin the investment projects that we have communicated, have been through FID such as the Antwerp investment.
As it pertains to Beaumont, we typically assess those activities.
I understand that there ---+ that may include some discussions with the regulators.
It doesn't indicate that we've made a discussion, and when we get close to an FID, and we've made that decision, then we'll communicate that accordingly.
Yes, so good question, <UNK>.
I mean as you all know, the Plains All American pipeline was down due to a failure of the line in the second quarter.
We've looked for options to go ahead and keep our facility on, without that pipeline running, or until we're able to find an alternative export route.
SYU will be shut down.
Before it was shut down, it was producing somewhere around 30,000 barrels a day.
In fact, that was a 2014 number.
So we'll keep focused on it, we'll keep working with the regulator, as well as the All American pipeline to identify the earliest restart.
<UNK>, we're in the risk management business.
Everything that we do has a level of risk that we've got to judge, whether it be geopolitical risk, economic risk, technical uncertainty, and that is the world we live in.
And I think the organization has demonstrated over the years that it's got the expertise and the capability to take on these more challenging resources, and convert them into value propositions for our shareholders.
So the areas you talked about, take a look at Papua New Guinea LNG.
No infrastructure.
We were able to build that up to a very successful project that's going to supply an important part of LNG demand in the future.
We have a good track record in all of these areas.
We're very good at capturing the learnings and transporting those learnings into our future resource development activities, to make sure that we maximize return.
And as I said to <UNK> earlier, if we don't see the value proposition there, we will find other ways to monetize that asset.
Well, remember, these projects that you referenced earlier are multi-year projects.
They happen over a period of time.
And we're looking for not only the market savings, but I'll stress again, the structural savings.
And let me use an example of what I'm talking about.
We went forward with both the [Kutandagi] and Hebron developments concurrently, because we saw a very consistent development option, and the tremendous benefit that we get by learning curve advantages.
So both JBS, we used a comparable design shop for both of them.
We used the same JBS contractor.
We used the same top side contractor, and we capture that immediate learning curve benefit.
On top of that, in a lower price cycle, as I said earlier, we're very well-positioned with a global procurement organization to be first in line in capturing those market savings.
And if, given our long-term investment and our expectation of what demand is going to do, we're very confident that over the timeframe, the things we're investing in today, some of them we won't see production on for five or ten years.
We're very confident in our demand projections and our ability to turn that into accretive financial performance.
<UNK>, just broadly speaking, we keep focused globally, and we've got those type of opportunities in other countries that we'll naturally maintain a line of sight on, should the right value proposition come forward.
And if you want to focus in the unconventionals, certainly.
The ownership structure in the Permian by way of example, is very diverse.
And where we can find natural synergies, over the last several years, we've made a number of bolt-on acquisitions that have increased our acquisition there.
And you get value uplift when we're able to do that, where it's within our operational structure.
That's correct.
Yes, well, obviously that's an annual process.
And we're ---+ we've fully replaced our production for 21 straight years.
We've got a very good inventory that we're working on, to convert to an FID decision in proved reserves, as well as a very active exploration program.
So we've been very successful, as the history shows, and I'd say that the prognosis in the future will remain the same.
Not off the top of my head, <UNK>.
No.
<UNK>, I'd just tell you that the organization wants to keep focused on the structural improvements as well as that market capture.
Everything is under focus constantly, even when we're at $100 per barrel.
But I don't have any specific numbers to break out on the benefit to date.
You know, remember it's all premised under very strong demand growth.
And our investments are strategically placed, in order to make sure that we can compete competitively over that time frame.
I think we're very, very well positioned in both the commodity and specialties markets.
I think it's an excellent question, <UNK>, because I think this is just one example of what we do across our whole global portfolio.
I talked about, by way of another example, we've shown you the XTO example.
In my prepared comments I talked about Erha North phase 2.
Last quarter, I talked about the start-up of the [Kazama Satellites] phase 2.
But that's another really good example, that instead of ---+ that we've sequenced the resource development in a manner that we can fully leverage a fixed investment over a period of time, and what that does is that lowers our overall cost structure.
Our E&D costs globally.
And in a deepwater environment where we've got to be very careful that we've got very good execution plans, and that we execute flawlessly.
So it's a very strong focus across the world, whether it's in the deepwater with the Kazama Satellites phase 2, and Erha north phase 2, or we're talking about the subarctic like in Kutandagi and Hebron, there is an ongoing emphasis to try to get that cost structure down.
That's why I made the point earlier that this is something that we have to work 365 days a year.
It's not driven by the price environment, it's driven by the need to be ever more productive and to compete in a market that there's a lot of investment dollars going in.
So we keep the line of sight on where we've got cost opportunities.
It's another good question, and you may recall, back in the analyst presentation, we spent a little bit of time, the chairman showed a chart that tries to ---+ goes to quantify the volume add that we make, with our focus on reliability.
We are making very significant gains on improving overall operating reliability, and I'll emphasize, not only in the upstream, but also across our manufacturing business as well.
As we focus intensely on cost structure, we do the same on uptime and reliability.
And really try to transfer those learnings quickly across the corporation, to make sure that once again, we're best in class.
Well, there's two parts to your question.
One is, if we've got resources that are in a resource base that ultimately we don't see the long-term value, as I indicated earlier, <UNK>, we will look for ways to monetize them, which may include some level of divestment.
In terms specifically of impairments, as you know, we live in a commodity price environment that has great volatility.
But as I've said several times in our annual outlook, the longer-term market fundamentals remain unchanged, and the lifespan of our assets really are measured in decades.
Therefore, long-term price views are more stable, and quite frankly, more meaningful for future cash flows and market value.
So we expect the business to more than recover the carrying value of the assets on the books.
Obviously in the course of our ongoing asset management efforts, we do confirm that asset values fully cover carrying costs.
Yes, <UNK>, I think it's just too early.
I look forward to that time that I can have more discussion about it, as well.
But as I said <UNK>, one well in a 6.6 million acre block, it's a very good start.
And just watch that space.
There's more to be said there, I think.
Well, to conclude, again, I want to thank you for your time, and your very thoughtful and insightful questions this morning.
We appreciate the opportunity to talk about the business, and really share the successes of our people that work day in and day out, to make sure that we're creating shareholder value.
So thanks again, and we look forward to further discussion in the future.
