XOMExxonMobil

Other factors that affect general economic conditions in the world or in a major region, such as changes in population growth rates, rates or living standards, periods of civil unrest, unrest or armed hostilities, escalating geopolitical volatility, government regulation or austerity programs, national or regional trade tariffs, trade sanctions or trade controls, international monetary and currency exchange rate fluctuations, decoupling of economies, disruptions in disruption, realignment, or breaking of current or historical trade or military alliances or military alliances, global trade or supply chain networks, changes in international trade patterns or shipping routes, or a broader breakdown in global trade, security or public health issues and responses, health, can also impact the supply and demand for energy and petrochemicals.

Some countries in which we do do, or seek to do, business lack well-developed legal systems, lack political or governmental stability, may be subject to regime changes, have not yet adopted or clear legal frameworks, may be unable to maintain clear regulatory frameworks, frameworks in the face of pressure on their systems from well-funded local or international groups opposing development of their resources, or may have evolving and unharmonized standards that vary or conflict across jurisdictions.

Even in countries with well-developed legal systems where ExxonMobil does business, we remain exposed to changes in law or interpretation or enforcement of settled law, including changes that result from concerted efforts to increase our legal exposure by groups opposed to the products we provide or international treaties and accords or changes by local jurisdictions encroaching on national regulatory frameworks or global issues, issues or changes resulting from imposition of extraterritorial laws and regulations, and changes in government policy or priorities that could adversely affect our results, such as:

Other factors that may affect the demand for oil, gas, petrochemicals or our other products, and therefore impact our results, include technological improvements in energy efficiency; seasonal weather patterns; increased competitiveness of, or government policy support for, alternative energy sources or potential substitutes for our products; changes in technology that alter fuel choices, such as technological advances in energy storage or other critical areas that make wind, solar, nuclear nuclear, or other alternatives more competitive for power generation; government actions to increase strategic reserves to enhance energy security; increased demand for artificial intelligence (AI), including the construction and expansion of AI data centers; changes in customer or consumer preferences for our products, including consumer demand for alternative-fueled or electric transportation or alternatives to plastic products; and broad-based changes in personal income levels.

A number of countries limit access to their oil and gas resources, including by restricting leasing leasing, licensing, or permitting activities, activities directly or may place resources off-limits from indirectly through the influence on these processes by well-funded local or international groups opposing the development altogether. of these resources.

We also may be adversely affected by the outcome of litigation government investigations or arbitration, especially in countries such as the United States in which very large and unpredictable punitive damage awards may occur; by government enforcement proceedings alleging non-compliance with applicable laws or regulations; regulations, or by state and local government actors as well as private plaintiffs acting in parallel that attempt to use the legal system to promote public policy agendas (including seeking to reduce the production and sale of hydrocarbon products through litigation targeting the Company or other industry participants), gain political notoriety, or obtain monetary awards from the Company.

Specific factors that can affect the performance of major projects include our ability to: negotiate successfully with joint venturers, partners, governments, suppliers, customers, or others; protect and enforce our contractual and legal rights, including with our joint venture partners; partners, host governments, and others; model and optimize reservoir performance; performance and production reliability; develop markets for project outputs, whether through long-term contracts or the development of effective spot markets; qualify for certain incentives available under supportive government policies for emerging markets and technologies; manage changes in operating conditions and costs, including costs of third party third-party equipment or services such as drilling rigs and shipping, supply-chain supply chain disruptions, and inflationary cost pressures; prevent, to the extent possible, and respond effectively to unforeseen technical difficulties that could delay project start-up start-up, incur or escalate costs, or cause unscheduled project downtime; and influence the performance of project operators where ExxonMobil does not perform that role.

Our future business results, business, including earnings, cash flows flows, and financing needs, may also be affected by the occurrence, severity, pace pace, and rate of recovery of future public health epidemics or pandemics; pandemics or other natural or human events beyond our control; the responsive actions taken by governments and others; and the resulting effects on regional and global markets and economies.

The continued adoption of similar legal practices in the European Union or elsewhere would broaden this risk and has begun to be applied to some of our competitors in the European Union. risk.

The Company’s objective Company seeks opportunities to play a leading role in the energy transition, including the Company’s announced ambition ultimately to achieve net zero with respect to Scope 1 and 2 emissions from operations our operated assets with continued technology development and government policy support where ExxonMobil is the operator, support, which carries risks that the transition, including underlying technologies, government policies, and markets as discussed in more detail below, will not be available or develop at the pace or in the manner expected by current net-zero scenarios.

Government actions intended to reduce greenhouse gas emissions include adoption of cap and trade regimes, carbon taxes, carbon accounting, carbon-based import duties or other trade tariffs, minimum renewable usage requirements, restrictive permitting, increased mileage and other efficiency standards, mandates for sales of electric vehicles, restrictions on sales of gasoline-only vehicles, mandates for disclosure of plans to reduce emissions or reduce the use or production of certain products, mandates for use of specific fuels or technologies, and other incentives or mandates designed to support certain technologies for transitioning to lower-emission energy sources.

ExxonMobil has established a Low Carbon Solutions (LCS) business unit and is continuing efforts in our existing businesses to advance the development and deployment of these technologies and projects, including CCS, hydrogen, hydrogen and ammonia, lower-emission fuels, and lithium, breakthrough energy efficiency processes, ProxximaTM resin systems, advanced energy-saving materials, low-carbon data centers, lithium, and other technologies.

These include global or regional changes or imbalances in the supply and demand for oil, natural gas, petrochemicals, and feedstocks and other market factors; economic conditions and seasonal fluctuations that impact prices prices, differentials, and differentials volume/mix for our products; developments or changes in local, national, or international laws, regulations, taxes, trade sanctions, trade tariffs, or policies affecting our business, such as government policies supporting lower carbon lower-carbon and new market investment opportunities, the punitive European taxes on the oil and gas sector and unequal support for different technological methods of emissions reduction or evolving, ambiguous ambiguous, and unharmonized voluntary and mandatory standards or extraterritorial laws and regulations imposed by various jurisdictions related to sustainability and GHG greenhouse gas reporting; timely granting of governmental permits, licenses, and certifications; uncertain impacts of deregulation on the legal and regulatory environment; changes in interest and exchange rates; variable impacts of trading activities on our margins and results each quarter; actions of co-venturers, competitors co-venturers or partners, competitors, and commercial counterparties; counterparties, including suppliers and customers; government actions in pursuit of national energy and security policies and priorities affecting our business; the outcome of commercial negotiations, including final agreed terms and conditions; the outcome of competitive bidding and project awards; the ability to access debt markets on favorable terms or at all; the occurrence, pace, rate of recovery and effects of public health crises; adoption of regulatory incentives consistent with law; reservoir performance, performance and optimization, including variability and timing factors applicable to unconventional resources and resources, the success of new unconventional technologies; technologies, and the ability of new technologies to improve recovery relative to competitors; the level, outcome, and timing of exploration and development projects and decisions to invest in future reserves and resources; timely completion of construction projects; projects and commencement of start-up operations, including reliance on third-party suppliers and service providers; final management approval of future projects and any changes in the scope, terms, costs costs, or assumptions of such projects as approved; the actions of government governments, non-governmental organizations, or other actors against our core business activities and acquisitions, divestitures or financing opportunities; war, civil unrest, armed hostilities, attacks against the Company or industry, and other geopolitical or security disturbances, including disruption of land or sea transportation routes; routes or distribution or shipping channels; decoupling of economies, and disruptions in disruption, realignment, or breaking of current or historical trade or military alliances and military alliances; or global trade or supply chain networks; escalating geopolitical volatility, including regime changes; expropriations, seizure, seizures, or capacity, insurance, shipping, import or export limitations imposed directly or indirectly by governments or laws; opportunities for potential acquisitions, investments or divestments and satisfaction of applicable conditions to closing, including timely regulatory approvals; the capture of efficiencies within and between business lines and the ability to maintain near-term cost reductions as ongoing efficiencies without impairing our competitive positioning; unforeseen technical or operating disruptions or difficulties and unplanned maintenance; the development and competitiveness of alternative energy and emission reduction technologies; consumer preferences including willingness and ability to pay for reduced emission products; the results of research programs and the ability to bring new technologies to commercial scale on a cost-competitive basis; and other factors discussed under Item 1A.

Actual future results, including financial and operating performance; earnings power; potential earnings, cash flow, dividends or shareholder returns, including the timing and amounts of share repurchases; total capital expenditures and mix, including allocations of capital to low carbon low-carbon and other new investments; realization and maintenance of structural cost reductions and efficiency gains, including the ability to offset inflationary pressure; plans to reduce future emissions and emissions intensity, including ambitions to reach Scope 1 and Scope 2 net zero from operated assets by 2050, to reach Scope 1 and 2 net zero in heritage integrated Upstream Permian Basin (1) unconventional operated assets by 2030, and in Pioneer Permian assets by 2035, to eliminate routine flaring in-line with World Bank Zero Routine Flaring, and to reach near-zero methane emissions from operated assets and other methane initiatives initiatives, and to meet ExxonMobil’s emission reduction plans and goals, divestment and start-up plans, and associated project plans as well as technology advances, including the timing and outcome of projects to capture, transport and store CO2, produce hydrogen and ammonia, produce lower-emission fuels, produce ProxximaTM resin systems, produce carbon materials, produce lithium, and use plastic waste as feedstock for advanced recycling; timely granting of governmental permits and certifications; future debt levels and credit ratings; business and project plans, timing, costs, capacities and profitability; resource recoveries and production rates; and planned Denbury Inc. and Pioneer integrated benefits, could differ materially due to a number of factors.

Identified Items (1) – 2023 $(2,301) million loss primarily due to the impairment of the idled Santa Ynez Unit assets and associated facilities in California; 2024 $215 million $0.2 billion gain mainly due to Argentina divestment, partly offset by Nigeria divestment and U.S. impairment. impairment; 2025 $(0.9) billion loss mainly due to asset impairments.

With advancements in technology and clear, consistent, stable, and effective government policies, In 2022, we aim announced our ambition to achieve net-zero Scope 1 and 2 greenhouse gas emissions in our operated assets by 2050. 2050, with advancements in technology and clear, consistent, stable, and effective government policies.

Progressed Started up the project with expected start-up in 2025 at the Strathcona refinery refinery, which is designed to use low-carbon hydrogen, locally-sourced and grown feedstocks, and our proprietary catalyst to produce 20 thousand barrels of renewable diesel per day to help reduce greenhouse gas emissions. diesel.

The roadmaps build on the Company’s 2030 emission-intensity reduction Our plans and, notably, include reaching net-zero Scope 1 and 2 emissions in our heritage integrated Permian Basin (1) unconventional operated assets by 2030, and by 2035 for 2035, including Pioneer assets. assets acquired in 2024.

The Company’s first In 2025, the Company added two new advanced recycling units to the Baytown facility started up in 2022 facility, tripling capacity at the site, and represents representing one of the largest advanced recycling facilities in North America.

Progressed This project with expected start-up started up in 2025, which will leverage leveraging two proprietary technologies to upgrade fuel oil to Group II lubes lubricant basestock and diesel, further strengthening ExxonMobil’s position as the largest basestock producer in the world. diesel.

Other spend of $0.9 $0.6 billion primarily reflects investments in the Low Carbon Solutions business to advance carbon capture and storage, lithium, and virtually carbon-free hydrogen (with approximately 98% of the carbon captured and stored) projects and technologies. business.

In assessing whether events or changes in circumstances indicate the carrying value of an asset may not be recoverable, the Corporation considers recent periods of operating losses in the context of its longer-term view of prices and margins.

Construction continues on Mechanical completion was achieved for the Golden Pass LNG project project, with Train 1 mechanical completion and expected first LNG production expected at in the end first quarter of 2025. 2026.

Consolidated company provisions made in 2024 2025 for environmental liabilities were $277 million ($208 million $0.4 billion ($0.3 billion in 2023), 2024), and the balance sheet reflects liabilities of $734 million $0.9 billion as of December 31, 2024, 2025, and $701 million $0.7 billion as of December 31, 2023. 2024.

However, actual volumes will typically vary from year to year due to the timing of individual project start-ups, operational outages, reservoir performance, regulatory changes, the impact of fiscal and commercial terms, asset sales, weather events, price effects on production sharing contracts, changes in the amount and timing of capital investments that may vary depending on the oil and gas price environment, international trade patterns and relations, and other factors described in Item 1A.