Exxon Mobil Corporation XOM, in partnership with Indonesian state-owned oil company Pertamina, has embarked on an appraisal drilling project for a carbon capture and storage (CCS) hub in Indonesia.
The initiative, announced during the Indonesia Petroleum Association (IPA) annual conference, marks a pivotal step in utilizing the nation's depleted oil and gas reservoirs, and saline aquifers for carbon dioxide storage.
The project, known as the Asri Basin Project CCS hub, is located in Pertamina’s Offshore South East Sumatra block. Per a joint study by Pertamina and ExxonMobil, the basin could store up to three gigatons of carbon dioxide, potentially requiring an investment of $2 billion.
The venture aligns with Indonesia's strategy to combat climate change by repurposing its geological formations to sequester carbon effectively. In a legislative move supportive of this environmental strategy, Indonesia has recently permitted CCS operators to reserve 30% of their storage capacity for imported carbon, further bolstering the country's commitment to global carbon reduction efforts.
In addition to the technical advancements in the Asri Basin, Pertamina and ExxonMobil have entered a framework agreement with South Korea’s Korea National Oil Corporation (“KNOC”). This partnership allows KNOC to participate in the project and contribute to the injection of emissions into the facility.
Simultaneously, ExxonMobil continues to bolster its oil exploration efforts globally. The company recently announced an oil discovery off the coast of Angola in Block 15. The discovery at the Likembe-01 well, which was drilled to a depth of 3,013 meters, encountered Miocene-age reservoirs. The well is part of the Kizomba B development area and is operated by ExxonMobil alongside partners Azule Energy, Equinor and Sonangol.
The developments underscore ExxonMobil's dual commitment to enhancing energy production and mitigating environmental impacts through innovative carbon storage solutions. The ongoing projects in Indonesia and Angola represent strategic moves by XOM to lead in sustainable energy advancements, while continuing to meet global energy demands.
Zacks Ranks & Stocks to Consider
ExxonMobil currently carries a Zacks Rank #3 (Hold).
Investors interested in the energy sector may look at some better-ranked stocks like SM Energy Company SM, Ecopetrol S.A. EC and Marathon Petroleum Corporation MPC, each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
SM Energy is an independent oil and gas company engaged in the exploration, exploitation, development, acquisition, and production of oil and gas in North America.
The Zacks Consensus Estimate for SM’s 2024 and 2025 EPS is pegged at $6.60 and $7.46, respectively. The stock has witnessed upward earnings estimate revisions for 2024 and 2025 in the past seven days.
Ecopetrol operates across various sections of the oil and gas industry, including the exploration, development, and production of oil and gas, refining, transportation, and the sale of petroleum products.
Ecopetrol has witnessed upward earnings estimate revisions for 2024 and 2025 in the past seven days. The Zacks Consensus Estimate for EC’s 2024 and 2025 EPS is pegged at $2.55 and $2.63, respectively.
Marathon Petroleum is a leading independent refiner, transporter and marketer of petroleum products. With a 10% increase in the quarterly dividend and a total shareholder return of approximately 31% in 2023, MPC's strong through-cycle cash generation positions it as an attractive investment option for those seeking consistent returns.
The Zacks Consensus Estimate for MPC’s 2024 and 2025 EPS is pegged at $19.53 and $16.78, respectively. The stock has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.
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