Despite ExxonMobil‘s (NYSE:XOM) loss of more than $20 billion in 2020, CEO Darren Woods has promised investors that the energy giant remains committed to paying out a “very strong dividend.”
Appearing on CNBC’s Squawk Box Thursday morning, Woods said Exxon chose to cut costs and dramatically reduce its capital spending to preserve the shareholder payout.
Exxon was something of an anomaly in the oil and gas industry last year, being one of the few companies that refused to suspend or even cut its dividend. BP (NYSE:BP), Eni (NYSE:E), and Royal Dutch Shell (NYSE:RDS.A)(NYSE:RDS.B) all slashed their payouts, with Shell’s being the first dividend cut in 70 years.
Exxon, though, did not raise its payout for the first time in years.
The CNBC interview with Woods follows Exxon’s investor day presentation the day before, in which the company laid out its plans to cut debt, increase investments in capital projects that offer the potential for high returns, and keep production stable.
By reducing costs and improving margins, Exxon believes it will be able to increase its cash flows, which will allow it to further increase its dividend, currently yielding 6.2% annually.
The oil company is also trying to show that it buys into the climate change argument by appointing new directors to its board, including a climate activist.
Woods told Squawk Box, “We were looking for people that have experience and a successful track record in allocating capital, finding value and opportunities, and helping businesses transition,” and he believes the new board appointments will achieve that.
Exxon also intends to spend upward of $3 billion through 2025 on low-carbon projects.
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