Engine No. 1 Activist Presentation Deck
Returns on upstream projects (~75% of capex) have been
falling for years, even during times of higher prices
"Retu
Spr
AREN
CAUS
"Return on capital employed [ROCE] is a report card, and while everyone can talk about individual projects
and how attractive they may appear to be, ultimately, over time, you have to look at, 'Well, how do all of those
individual projects add up?""
Former ExxonMobil CEO Lee Raymond
60%
50%
40%
30%
20%
10%
0%
-10%
-20%
Upstream Return on Average Capital Employed (ROCE %)
Avg. crude price
of $49.97/bbl
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Upstream ROCE (LHS)
Avg. crude price
of $50.89/bbl
Crude price per barrel (XOM realized avg, RHS)
Chart Source: ExxonMobil 10-Ks; Upstream ROCE excludes corporate investment and costs. 2020 ROCE includes $19.4bn
in asset impairment, excluding which the ROCE is still negative (-0.4%). Quote Source: Private Empire by Steve Coll (Penguin
Books, 2012), page 50.
$120
$110
$100
$90
$80
$70
$60
$50
$40
$30
$20
REENERGIZE
EXXON//
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