Darren Woods’ Introduction to the Oil Industry:
Darren Woods’ initial career aspirations did not include the oil industry, but he was drawn to ExxonMobil’s management approach and career opportunities. Woods joined ExxonMobil in 1992 with the intention of exploring the company’s opportunities, not envisioning his current leadership position. He emphasized the company’s emphasis on earning one’s place through merit and the positive relationship he has had with the company over 30 years.

ExxonMobil’s Reputation During Woods’ MBA Program:
During the 1992 MBA program, large companies like ExxonMobil were not in vogue due to perceptions of bureaucracy and slow decision-making. Woods found ExxonMobil’s approach to delegating responsibility and its expectations for employees appealing.

Woods’ Career Journey at ExxonMobil:
Woods emphasized that every job he has held at ExxonMobil has been challenging and has involved increasing responsibility. The company emphasizes a long-term mindset and the expectation that employees leave each job better than they found it in a sustainable way. Woods finds personal and professional satisfaction in working on projects that are important to society.

Woods’ Upbringing in Kansas:
Woods grew up in Kansas. (Information about his upbringing is not provided in this segment of the transcript.)

Darren Woods’ Background:
Born in Kansas but moved around the world due to his father’s work with the U.S. military. Lived in South Korea, the Philippines, Hawaii, and Texas. Attended Texas A&M University after high school.

Impact of Mobility:
Gaining a broader perspective and appreciation for diversity. Developing a strong sense of values and principles. Learning to challenge narratives and paradigms due to exposure to different cultures and perspectives. Becoming more sensitive to understanding different viewpoints and recognizing that there is often no single right way of looking at things.

Resilience and Grit:
Moving around frequently, especially during adolescence, can be challenging and requires resilience. Developing a sense of self and value, as well as resilience to criticism and bullying. Mobility exacerbates the challenges of growing up, making individuals tougher and more resilient.

Energy Transition and the Role of Oil:
Oil’s benefits include its high energy density, functionality, availability, affordability, and transportability. Beyond its use as an energy source, oil provides the foundation for many products society needs and values. The utility of oil makes it difficult to transition away from its use.

Climate Change and the Need for Transition:
Darren Woods acknowledges that fossil fuel emissions contribute to the risk of climate change and the need to transition to a cleaner energy system.

Challenges of the Energy Transition:
The transition to a new energy system requires finding alternatives with the same utility, affordability, and availability as fossil fuels while addressing climate change. The cost of the transition and society’s ability to bear that cost pose significant challenges.

Progress and Limitations of Renewable Energy:
Wind, solar, and electrification are important technologies, but they are necessary but not sufficient for addressing climate change. The focus on these technologies has been too narrow, neglecting other essential solutions.

ExxonMobil’s Focus on Molecule Management and Transformation:
ExxonMobil emphasizes its core competitive advantages in managing and transforming hydrogen and carbon molecules. The company sees opportunities in carbon capture and storage, hydrogen, and biofuels as part of the solution to climate change.

ExxonMobil’s Unique Capabilities for Low-Carbon Solutions:
The company highlights its technology capabilities, scaling abilities, operational expertise, and experience in starting businesses from scratch. ExxonMobil believes these advantages enable it to bring unique value to the development of low-carbon solutions.

Aiming for Above-Average Returns:
ExxonMobil sets a high standard for its investments, aiming to generate above-average industry-leading returns. The company believes that its unique advantages should translate into higher shareholder value and returns.

Low-Carbon Solutions Business:
ExxonMobil’s recently launched low-carbon solutions business pursues projects that generate both solutions and returns. The company seeks to invest in solutions while maintaining financial viability.

Focus on Carbon Capture and Storage:
Carbon capture and storage is a key area of focus for ExxonMobil due to its potential to reduce emissions from industrial processes and power generation. The company emphasizes the importance of developing technologies that can capture and store carbon at scale.

Carbon Capture and Utilization (CCU):
Carbon capture is a critical part of the solution set for addressing emissions. ExxonMobil has extensive experience in carbon capture, having captured more anthropogenic CO2 than any other company. The cost of carbon capture is high for dilute sources of CO2, but ongoing work aims to make it more economical.

Focus on Emission Reduction:
The focus should be on reducing and eliminating emissions, not just eliminating the use of oil and gas. Preserving existing infrastructure and processes while reducing emissions is a more cost-effective solution.

Investment in Low-Carbon Solutions:
ExxonMobil plans to invest 15% of its new investments in low-carbon solutions. The opportunity set for low-carbon businesses is currently small and nascent, with limited policy incentives. The market for carbon reduction is limited, and technology costs remain high.

New Technologies and Solutions:
There is no silver bullet solution for emission reduction; a mix of solutions is needed. ExxonMobil is exploring various technologies, including blue and green hydrogen, depending on regional context and cost-effectiveness. Nuclear energy and other capabilities are crucial for achieving long-term emission reduction goals.

Scope 3 Emissions:
ExxonMobil believes that using Scope 3 emissions at the company level can have unintended consequences. Scope 3 targets may disincentivize the production of cleaner energy sources like LNG, leading to increased coal usage. ExxonMobil advocates for life cycle analysis and carbon intensity as better measures for holding companies accountable.

Energy Policy Approaches:
The US Inflation Reduction Act incentivizes industry to invest in emission reduction and sets carbon intensity standards. In Europe, extra taxes are imposed on carbon emissions.

Carrot and Stick Approaches:
Darren Woods discusses two primary approaches to reducing emissions: the carrot and stick approaches. The carrot approach focuses on incentivizing market solutions without picking specific technologies, while the stick approach involves penalizing companies for their emissions. Woods believes that the carrot approach is more effective, as it allows the market to determine the most cost-effective solutions.

Critique of European Emission Policies:
Woods criticizes the European approach to emissions reduction, which he sees as prescriptive and focused on micromanaging solutions. He argues that this approach is a mistake because it picks winners and losers and ignores the broader potential of market-driven solutions. Additionally, he believes that penalizing companies for emissions associated with making products that society needs has significant consequences, potentially driving industry out of the economy.

Emphasis on Supply vs. Demand:
Woods emphasizes the importance of addressing both the supply and demand sides of the emissions equation. He points out that penalizing companies for emissions only shifts production to other jurisdictions, while demand for products remains constant. As long as demand persists, prices will increase, and consumers will continue using those products due to a lack of viable alternatives.

ExxonMobil’s Resource Allocation Strategy:
Nicolai Tangen inquires about ExxonMobil’s decision to leave the Norwegian shelf, given their previous license 001, now part of Johan Sverdrup. Woods explains that ExxonMobil’s approach is to allocate resources where they can bring the most value to shareholders. They don’t start with a predetermined opinion about a specific resource or country but instead evaluate opportunities based on their potential for value creation.

Darren Woods’ Daily Engagement with Geopolitics:
Woods emphasizes the significance of geopolitics in managing Exxon’s global business. He highlights the impact of the Russian invasion of Ukraine on energy markets and lifestyles in Europe. Woods acknowledges the national security and societal aspects of energy, leading to governments’ focus on energy policies.

No Political Aspirations:
Woods clarifies that he has no plans to pursue a political career, despite his diplomatic and principled approach. He emphasizes Exxon’s commitment to long-term views and fundamentals, rather than short-term political cycles.

The Impact of AI on Exxon:
Woods anticipates a profound impact of AI on the world and various industries, including Exxon. He sees AI as a means to automate routine tasks and enable employees to focus on higher-value, intellectually challenging work. Woods believes AI will accelerate innovation and implementation cycles, leading to faster problem-solving. Exxon’s recent reorganization aligns its IT group with the research and technology organization to leverage AI effectively.

Exxon’s Corporate Culture:
Woods defines Exxon’s corporate culture based on core values such as integrity, care, courage, resilience, and excellence. These values guide the company’s operations and contribute to its success. The focus on fundamentals and meeting societal needs is central to Exxon’s corporate culture. Woods acknowledges the admiration for Exxon’s corporate culture within the industry.

ExxonMobil’s Limited Role in the Energy System:
Darren Woods acknowledges that ExxonMobil’s influence on the energy system is limited, accounting for only 2-3% of the global energy supply. The company views itself as a participant and price taker rather than a driving force in shaping the industry.

ExxonMobil’s Adaptation to Changing Needs:
Woods highlights ExxonMobil’s history of adapting to society’s evolving energy needs, transitioning from kerosene to gasoline and developing new products. The company relies on its fundamental capabilities in molecule management to meet these changing demands.

The Chemical Business and Portfolio Expansion:
ExxonMobil’s chemical business has been a significant growth area, driven by the company’s expertise in molecule management. Woods anticipates continued evolution in the company’s product portfolio, focusing on meeting society’s diverse demands.

ExxonMobil’s Learning from Others:
Woods acknowledges the importance of learning from other industries and companies, particularly in areas where ExxonMobil seeks improvement. The company engages with industries such as airlines and nuclear power to enhance its safety and operational practices.

Addressing Uncertainty and External Engagements:
Woods emphasizes the need to focus on external views and engagements to address uncertainty and challenges. He cites the example of engaging with other industries to raise the bar in safety and operational excellence.

Company Technology:
ExxonMobil values technology as a foundational element for its success. The company engages with various sources, including national labs, universities, private ventures, and startups, to bring in relevant perspectives and stay updated with the latest advancements. ExxonMobil collaborates with thought leaders in each field to understand the art of the possible and respond to changing trends.

Hiring and Values Alignment:
At senior levels, ExxonMobil focuses on ensuring value systems alignment with potential hires. The company seeks individuals who share the values of the organization and are committed to contributing to society through problem-solving and learning. Long-term perspectives and a dedication to fundamentals are essential attributes for success in the company.

Career Fulfillment and Satisfaction:
ExxonMobil offers a diverse range of career opportunities, allowing employees to move across different businesses and industries within the company. The company encourages employees to prioritize fulfillment and satisfaction in their work, as this leads to higher motivation and better results. Young people are advised to focus on finding a job that aligns with their values and passions, rather than solely pursuing money or titles.

Dedication and Hard Work:
Darren Woods emphasizes the importance of hard work and dedication in his role as CEO of ExxonMobil. He believes that finding a fulfilling job makes work a part of life rather than a trade-off. Woods draws a parallel to athletes who dedicate themselves to their sport, finding fulfillment in the challenges and growth opportunities it presents.

CEO Fulfillment and Company Values:
Woods finds fulfillment in the challenges and responsibilities of being the CEO of ExxonMobil. He is humbled by the opportunity to steward and direct a company with a long history of success. Woods values the company’s focus on doing the right thing for the right reasons and believes in the importance of the work ExxonMobil does.

Leadership and Legacy:
Darren Woods feels a strong sense of obligation to perpetuate ExxonMobil’s history and legacy, leaving the company stronger than he found it. He believes that every job in the company carries the expectation to improve upon it, a mindset he brings to his role as CEO. Woods recognizes that each leader tackles challenges during their tenure and strives to leave the company in a better position.

Organizational Contribution:
Woods emphasizes that the organization’s success is the result of the collective efforts of all employees, from those working in plants to those in leadership positions. He believes that the contribution of every individual ultimately makes the difference in the company’s bottom line and success.

Personal Interests:
Woods enjoys barbecuing and smoking meats, which is a family tradition for him. He prefers ribeye steaks as his favorite cut of meat for barbecuing.