The man poised to replace Rex Tillerson as the leader of America’s most influential energy giant helped transform Exxon Mobil’s refining business from a poor cousin of oil production to the primary profit generator.
Darren Woods, the company’s refining boss since 2012, may be named the next chief executive officer after Tillerson was picked as secretary of state by President-elect Donald Trump on Tuesday. Even if Tillerson doesn’t become the top diplomat — three Republican senators have expressed misgivings about his nomination — he’s due to retire no later than March, when he will reach Exxon’s mandatory retirement age.
Woods, 51, would inherit a drilling and refining behemoth hamstrung by a 2 1/2 -year slump in energy markets, ill-timed investments in North American shale and Russia, and allegations of deceiving investors with a climate-change cover-up.
Still, Trump’s election, OPEC’s plan to cut production and Woods’s ability to boost the value of the company’s refineries have all combined to change the face of the industry for Exxon heading into the future.
A President Trump will “absolutely” be a boon to Exxon and the rest of the oil industry, said Fadel Gheit, an analyst at Oppenheimer & Co. “The industry hasn’t asked for a hand up from Washington, but instead has said, ‘Get off our backs.’ Less regulation means less burden” on oil explorers.
Woods’s elevation to CEO was telegraphed with his December 2015 promotion to president and the board of directors. He has been a member of the six-person management committee that oversees day-to-day operations since June 2014.
For the past five quarters at Exxon, refining has outperformed so-called upstream oil and natural gas wells, a reversal of the traditional relationship. Since June 2015, Exxon’s refineries and related business lines raked in $6.34 billion, compared with $3.05 billion for the oil and gas business.
During that same period, refining burned through just $3.1 billion in capital spending, compared with almost 10 times that amount — $22.9 billion — in the upstream segment.
A Kansas-born electrical engineer by training, Woods joined Exxon as an analyst in 1992 and rose through the ranks on the refining and chemicals side of the business. His main rival in the competition to succeed Tillerson was Jack Williams, a drilling engineer who oversaw oil and natural gas projects from Louisiana to Malaysia before taking control of XTO Energy, the Fort Worth-based shale explorer Exxon bought in 2010 for $35 billion.
One of Woods’s most pressing tasks will be figuring out how to rescue a stillborn Russian joint venture that locked up $1 billion in investments and a billion-barrel Arctic oil discovery behind a wall of international sanctions.
When Exxon signed a 2011 agreement to join with Rosneft in drilling Arctic, deepwater and shale fields, it was seen as a crowning achievement of Tillerson’s career. But the work slammed to a halt when the U.S. and European Union imposed economic sanctions against Russia in 2014.