HOUSTON, Jan 31 (Reuters) – Exxon Mobil Corp (XOM.N) announced on Monday a sweeping restructuring of its global operations that will combine its refining and chemicals businesses into one and put its energy transition business on the same footing as its other operations.

The sweeping restructuring marks its latest cost-cutting effort after activist investors seeking to boost returns and address the energy transition won three seats on its board last spring. Exxon has pledged to cut operating costs by $6 billion by next year after suffering a historic loss of $22.4 billion in 2020.

The changes were first considered around 2017, Exxon Senior Vice Chairman Jack P. Williams told Reuters. At this time, Exxon combined its fuels and lubricants division with supply and refining.

“It’s an evolution,” Williams said. “We’ve been working on it for a while.”

Bringing its low-carbon business, which is seen as a response to investor demand for low-emission fuels and technologies, to the same level as its other two businesses will give Exxon more flexibility to redirect investments as it grows. as the business adapts to the energy transition, Williams mentioned.

NO JOB CUTS PLANNED

The restructuring will not impact fourth-quarter financial results, which the major US producer announced on Tuesday. Exxon does not plan to cut jobs as a result of the restructuring, spokeswoman Erin McGrath said.

Linda DuCharme, former president of Exxon Mobil Upstream Integrated Solutions and Upstream Business Development, has been named head of Exxon’s technology and engineering unit, the company said.

Karen McKee, former president of Exxon Chemical, will lead the combined petrochemical unit, called Exxon Mobil Production Solutions.

Exxon’s upstream oil and gas production units will be consolidated into a single organization, Exxon Mobil Upstream Company led by Liam Mallon, former president of Upstream Oil and Gas, the company said.

“Aligning our businesses with market-driven value chains and centralizing service delivery provides the flexibility to ensure our most skilled resources are applied to the highest business priorities and position us to deliver better returns to shareholders,” Chief Executive Darren Woods said.

PROFITS REBOUND

Beginning April 1, Exxon will be organized into three business segments: its upstream oil and gas production unit, the combined downstream refining and chemicals business, and its latest energy transition business, called Low Carbon. Solutions, the company said in a filing.

Past cost-cutting measures and higher oil prices are expected to generate quarterly earnings per share of $1.93, compared to adjusted earnings of three cents per share a year ago.

The restructuring will combine its technology operations, some of which had been outsourced to individual units. The new single technology organization will be called Exxon Mobil Technology and Engineering, Exxon said.

Exxon will also move its headquarters from Irving, Texas to its campus north of Houston. This move is expected to be completed by mid-2023.

Reporting by Sabrina Valle Editing by Marguerita Choy

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