When someone from ExxonMobil, an industry bellwether and the largest public oil company in the world, talks, people listen. At its helm is Rex Tillerson.
By 2006, investors began to realize this was not their grandfather’s ExxonMobil, as the mega-firm transitioned from leadership under the venerable Lee Raymond to future-focused Tillerson. Shortly thereafter, news emerged of forward-thinking strategies meant to keep the Irving, Texas-based company in the energy-supply business.
Experts agree that to satisfy future energy demand, the world must look beyond conventional oil-gas-coal scenarios. Emerging markets for unconventional hydrocarbons and biofuels, in a variety of forms, make development of such resources a “must-do.”
Under Tillerson’s leadership, in one of the biggest deals since Exxon merged with Mobil, the supermajor opened talks with Fort Worth-based XTO Energy Inc. to acquire the independent producer and its resource base, the equivalent of 45 trillion cubic feet of gas.
If the $41-billion deal is completed (it was pending at press time), ExxonMobil will become one of the largest unconventional gas producers in North America.
Yet, XTO was not the supermajor’s first shale-oriented target. During 2009, ExxonMobil increased its position in the Marcellus shale via a 50-50 joint venture with privately held Pennsylvania General Energy, headquartered in Warren, Pennsylvania.
The JV holds some 290,000 gross acres in the play. Including this capture, ExxonMobil’s total global unconventional gas acreage now stands at over 5.5 million net acres, excluding the as-yet unconsummated XTO deal.
Prior to its entrance into the shales, Tillerson and his team took another path less traveled. In one of the more unusual, yet promising, alternative energy developments of the decade, ExxonMobil invested in a next-generation biofuel—photosynthetic algae.
In July 2009, with Tillerson’s approval and support, ExxonMobil formed a partnership with Synthetic Genomics Inc. (SGI), a privately held company, to develop next-generation biofuels using photosynthetic algae.
“We’ve announced a 10-year research-and-development program with SGI to produce liquid transport fuels from photosynthetic algae,” says ExxonMobil spokesperson Rob Young. “As part of the process, we made an initial investment of $600 million, with potential for further investment in the billions of dollars.
“Photosynthetic algae has several benefits not found in other alternative fuels,” he says. It produces bio-oil that can be processed into biofuels similar in molecular structure to gasoline and diesel, ensuring compatibility with existing refineries, pipelines and storage tanks. The algae-energy yields are significantly higher, and it requires less land mass, does not compete with food production and “it eats CO2.”
ExxonMobil is confident its scale-and-production design will evolve into a commercially competitive product, but Young says this is a long-term project with milestones set to judge its success along the way. The partnership’s first research lab is scheduled to be built in San Diego in 2010.
Tillerson is a native Texan who earned a bachelor of science in civil engineering at the University of Texas at Austin before joining Exxon Co. USA (EUSA) in 1975 as a production engineer. In 1989, he became general manager of EUSA’s Central Production Division, responsible for operations in Texas, Oklahoma, Arkansas and Kansas, before going international.
In 1995, he was named president of Exxon Yemen Inc. and Esso Exploration and Production Khorat Inc. In 1998, Tillerson became vice president of Exxon Ventures (CIS) Inc. and president of Exxon Neftegas Ltd. In those roles, he was responsible for Exxon’s holdings in Russia, the Caspian Sea and Sakhalin I.
After the $81-billion merger of Exxon and Mobil Corp. in 1999, Tillerson became executive vice president of ExxonMobil Development Co. and was named senior vice president of ExxonMobil Corp. in 2001. He was later elected president of the corporation and member of the board of directors. In 2006, he assumed his current position after the retirement of former chairman and chief executive Raymond.
Not content to merely head the largest publicly traded company in the world, Tillerson is also a member of the executive committee and policy committee of the American Petroleum Institute, the Center for Strategic and International Studies, the National Petroleum Council, the Business Roundtable and its Energy Task Force, the Business Council for International Understanding, the Emergency Committee for American Trade, the Executive Board of the Boy Scouts of America, the United Negro College Fund, and more.
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