Four months after the acquisition, US energy giant ExxonMobil plans to lay off 111 employees from its subsidiary Denbury.
On March 7th, Texas, USA, announced this news.
Danbury Company is an independent energy company focused on carbon capture, utilization, and storage (CCS) solutions and improving oil recovery. It captures and injects over 4 million tons of industrial carbon dioxide annually.
This layoff may be related to the decline in performance of ExxonMobil. ExxonMobil's financial report shows that in the fiscal year 2023, the company's net profit was $36.01 billion, a year-on-year decrease of 35.4%; The operating revenue was 334.697 billion US dollars, a year-on-year decrease of 16.42%.
The financial report shows that last year, ExxonMobil only achieved a year-on-year increase in net profit for its specialty products division, reaching $2.714 billion, a year-on-year increase of 12%. The performance of other business departments has declined.
Among them, ExxonMobil's upstream business unit had a net profit of 21.308 billion US dollars, a year-on-year decrease of 42%; The net profit of the energy product sales department was 12.142 billion US dollars, a year-on-year decrease of 28%; The net profit of the chemical products department was 1.637 billion US dollars, a year-on-year decrease of 54%; The company's financial department suffered a net loss of 1.791 billion yuan, an increase of 8% year-on-year.
At present, ExxonMobil has not yet disclosed the performance contribution of its low-carbon business.
Last November, ExxonMobil completed its acquisition of Danbury Company for $4.8 billion (approximately RMB 34.553 billion), aiming to strengthen ExxonMobil's competitiveness in the low-carbon field.
Danbury owns and operates the largest carbon dioxide pipeline network in the United States, with a total length of over 2000 kilometers, including nearly 1500 kilometers of carbon dioxide pipelines in Louisiana, Texas, and Mississippi, as well as 15 onshore carbon dioxide storage points.
This acquisition has enabled ExxonMobil to acquire Danbury Resources' oil and gas business along the Gulf of Mexico coast and near the Rocky Mountains, including proven reserves of over 200 million barrels of oil equivalent and current daily production of 47000 barrels of oil equivalent.
ExxonMobil CEO Woodlen has stated that the transaction is an important step in the company's low-carbon solutions business profitability growth. ExxonMobil's expertise, combined with Danbury's talent and carbon dioxide pipeline network, will expand its leadership position in the low-carbon field to meet the decarbonization needs of industrial customers and reduce operational carbon emissions.
According to data from Danbury, the company's total revenue in the first half of last year was approximately 670 million US dollars (approximately 4.823 billion yuan), a year-on-year decrease of 25%; Net income was approximately 160 million US dollars (approximately 1.151 billion RMB), a slight increase of 0.6% year-on-year.
ExxonMobil is not the first oil company to lay off employees in the low-carbon sector.
At the end of October last year, Shell planned to lay off its low-carbon solutions department globally, with a layoff rate of 15%, for a total of 200 positions. Among them, the main focus is on hydrogen transportation business lines, while CCS and carbon sequestration business lines have not been affected.
The spokesperson for Shell Asia Pacific once stated in an interview with Interface News that Shell needs to reform its low-carbon business based on the principles of "focusing on performance, discipline, and simplification", and therefore made the above-mentioned personnel adjustments. Some affected employees will be integrated into other departments of Shell.
Due to declining performance, ExxonMobil has implemented multiple layoffs in recent years.
In the third quarter of 2020, ExxonMobil suffered a loss of $680 million, setting a record for three consecutive quarters of losses in the company's history. The net profit for the same period last year was $3.17 billion.
For this reason, ExxonMobil announced that it will reduce its global workforce by 15% by the end of 2022, resulting in approximately 14000 layoffs, including 1900 positions in the United States and previously announced layoffs in Europe and Australia.
In 2021, according to Reuters, due to the unprecedented market impact brought by COVID-19, ExxonMobil announced that it would cut 7% of its staff in Singapore this year, affecting 300 positions.
In response to the recent layoffs at Danbury Company, Interface News called ExxonMobil but had not received a response as of the time of publication.