ExxonMobil (NYSE:XOM), the world’s largest oil company has announced it will spend $185 billion over the next five years to locate and produce new oil and gas resources to meet the globe’s growing energy demand.
The fossil fuel giant says it expects global energy demand to increase 30% by 2040 compared to 2010 levels. Therefore, it is increasing its spending on research and development and refining. The company plans to spend $37 billion per year from now until 2016 — a 29% increase from the company’s previous five-year investment plan.
Exxon CEO Rex Tillerson said, “An unprecedented level of investment will be needed to develop new energy technologies to expand supply of traditional fuels and advance new energy sources. We are developing a diverse portfolio of high-quality opportunities across all resource types and geographies.”
A large piece of this portfolio will be natural gas. The company believes natural gas will be the fastest growing energy resource of the future — a recent survey shows this is nearly a unanimous opinion in the oil and gas industry.
Exxon anticipates oil and gas meeting 60% of energy demand over the next 30 years. In 2010, the company purchased XTO Energy for $30 billion. This acquisition made Exxon the largest natural gas producer in the United States.
In order to do meet the world’s growing energy appetite, the industry must locate the resources. These resources are becoming increasing difficult to locate, especially those within the jurisdiction of the United Staes. Most of America’s untapped oil is located offshore under thousands of feet of water, and most of its plentiful natural gas supply is located in shale reserves which require controversial extraction means.
There is no easy answer to increasing oil and gas production through locating new oil and gas reserves, although Exxon is determined to do it.