Exxon Mobil's Announced Denbury Deal Worth $4.9 Billion
Exxon Mobil Corp has confirmed a deal to purchase an oil & natural gas company 'Denbury Inc.' for a sum of $4.9 billion US Dollars. Denbury Inc. is known for its Co2 sequestration operation, which will allow Exxon Mobil to expand.
The $4.9 billion deal also reveals how Exxon Mobil is committed to reducing its greenhouse gas footprint while making money from an emerging market.
In the USA, the strategy of Carbon sequestration remains a favorite among the oil and gas companies. This will allow them to continue with oil & gas production while reducing their emissions. After the recent announcement of US tax credits, the process of burying CO2 underground has gained some major traction.
As per the details, the CO2 pipeline network of Denbury will allow Exxon Mobile to provide CO2 removal services to CF Industries, Linde AG, and other companies. As for the Exxon Mobil offshore storage sites, they are still far from complete & will likely take several more years.
A Small Deal For Exxon Mobil
On the surface, it appears to be a very straightforward and logical process for Exxon Mobil to improve its carbon management technology. But when we look at the global footprint of Exxon Mobil, it becomes clear that it is a very small deal.
In the USA, one of the largest CO2 pipeline networks is owned by Denbury, which spans 925 miles. Once the recent done is complete, it will become accessible to Exxon Mobil.
Just two years ago, Exxon announced its new business, 'Low Carbon Solutions,' and had plans to generate massive revenue by cutting carbon emissions. In fact, the company even said that its new business would outperform the revenue from traditional operations within a decade.
Now it appears that Exxon Mobil is really serious about its plan as it has already poured several billion dollars into the new deal.
By the end of 2027 or 2028, Exxon also plans to start a hydrogen plant in the state of Texas. According to the company, hydrogen has big potential for becoming a clean fuel.