Exxon to spend $185 billion over five years

NEW YORK – Exxon said Thursday that it will spend about $150 billion over the next five years to find more oil and natural gas to satisfy the world’s growing energy appetite.

Exxon Mobil Corp., the world’s largest publicly traded energy company, expects global energy demand to increase 30 percent by 2040, compared with 2010 levels. As demand grows, CEO Rex Tillerson said, Exxon will plow more money into a global search for new resources. Including investments in its refining and chemicals business, Exxon’s capital budget for 2012 through 2016 will total $185 billion, up 29 percent from the prior five-year period.

“Unprecedented levels of investment are needed to meet the scale of the energy challenge,” Tillerson told analysts at the New York Stock Exchange.

While pledging to boost spending, Exxon at the same time cut its long-term expectation for average annual production growth to 2-3 percent, from a previous forecast of 4-5 percent. And Tillerson said Exxon’s production could fall by 3 percent this year, after rising just 1 percent in 2011.

This highlights a key challenge for the oil and gas industry: It’s spending increasing amounts of money to achieve marginally higher, if not lower, rates of production.

Oil companies are struggling to tap new oil sources fast enough in an environment where big finds are rarer and costlier to exploit.

Chevron Corp., BP and Royal Dutch Shell all produced less oil last year than in the prior year.

Altogether, Exxon said 21 oil and gas productions will begin production by 2014, and it expects to add more than 1 million barrels per day of oil and gas by 2016.