In Good Company with Nicolai Tangen - Darren Woods CEO of ExxonMobil

Episode Date: June 7, 2023

A thought-provoking conversation with the CEO of an industry giant, the powerhouse behind global energy for over a century, ExxonMobil. This is an important conversation you don’t want to miss. The production team on this episode were PLAN-B’s Nikolai Ovenberg and Niklas Figenschau. Background research was done by Sigurd Brekke and Shilpi Nanda with input from portfolio manager Ståle Lægreid.Links:Watch the episode on YouTube: Norges Bank Investment Management - YouTubeWant to learn more about the fund? The fund | Norges Bank Investment Management (nbim.no)Follow Nicolai Tangen on LinkedIn: Nicolai Tangen | LinkedInFollow NBIM on LinkedIn: Norges Bank Investment Management: Administrator for bedriftsside | LinkedInFollow NBIM on Instagram: Explore Norges Bank Investment Management on Instagram Hosted on Acast. See acast.com/privacy for more information.

Hi everyone, and welcome to our podcast, In Good Company. I'm Nikolaj Tangen, the CEO of the Norwegian Southern Wealth Fund. In this podcast, I talk to the leaders of some of the largest companies we are invested in, so that you can learn what we own and meet these impressive leaders. Today, I'm speaking to Darren Woods, the chair and CEO of the energy giant ExxonMobil. ExxonMobil is one of the largest and most powerful companies in the world, and it's been the dominant energy company for over a century. It is also the largest descendant of Rockefeller's Standard Oil. We own over 1% of ExxonMobil, translating into 50 billion kroner

of 5 billion US dollars. Darren is a very impressive leader, and he has some challenges, but also huge opportunities in front of him, which we will discuss today. Tune in. So Darren, a big welcome as we say in Texas. Howdy. Howdy. Good to see you. Likewise. Now, you run one of the most fantastically huge oil companies in the world. What was your first meeting with oil when you were young? Well, I have to tell you, coming out of university, my MBA program, oil wasn't my first or the energy industry wasn't my first go-to industry, but ExxonMobil was interviewing. I went and talked to the company, and basically the way they think about managing a business and the career opportunities they provide is what attracted me. I joined the company back in 1992 with, I guess, intentions to better understand what that opportunity set looked like.

Never envisioned at that time that I would find myself where I am today 30 years plus on. So it's been one of these things. I always feel like every day you earn your place in the company and the company earns their place with you. And that's been, I think, a very positive relationship over the 30 plus years. Was it like the most prestigious thing one could join at the time? Actually, I would tell you coming out of the MBA program in 1992, I think there was a general view that large companies were not in vogue. The perception of bureaucratic process is large, slow-moving companies. And so I would say it

actually was quite counter to what was in vogue. But frankly, the approach that the company takes and how it delegates responsibility and the expectation it puts on people coming into the company, I found attractive. And I can say over the 30 years I've worked with Exxon, ExxonMobil, every job has been a challenge. Every job has been more and more responsibility. And the company really emphasizes the expectation that every job you take, you go in, one, with a very long-term mindset, and then two, with a view that how job you take, you go in, one, with a very long-term mindset, and then two, with a view that how do you make things better on a sustainable basis?

And the expectation is you leave every job better than you found it. So you grew up in Kansas. What was your upbringing like? Well, actually, I was born in Kansas, but my father worked with the U.S. military, I was born in Kansas, but my father worked with the U.S. military, and we moved around the world like a military family would. We were not in the military, but like I said, my father worked closely with them. So I moved every couple of years. We lived in South Korea, the Philippines, Hawaii. My dad's headquarters was in Texas, and so we'd find our way back to Texas every once in a while, but frankly, just moved all over the world. Found myself back in Texas

my junior year in high school, finished my senior year, and then wanted to stay in Texas for a little while and went to Texas A&M. And by the time I graduated, I was ready to get moving again and see the world and took off with jobs around the U.S. and then ultimately with Exxon and overseas again. So this moving around, how do you think that's impacted you? Well, I think it gives you a very different perspective. I think it's powerful. In fact, I believe so much in it that I put my kids through the same challenges that I went through growing up.

It's hard, I think, as a young person moving and constantly finding yourself as an outsider in a new culture. And I think one of the things that comes from that is to get very focused on values in your own value system because constantly moving from one culture to the other, you know, if you're not grounded in what you think your values are or you aren't grounded in your own principles, then you're kind of almost kind of afloat in this ever-changing dynamic environment. I think the other thing is, you know, being immersed in different cultures and seeing, you know, things from different different cultures and seeing, you know, things from different perspectives as growing up, you kind of learn that a lot of times there's a lot of opinion there, you know, it's in the eye of the beholder, frankly. And so it leads you to,

I think, really challenge what I would say are the narratives or the paradigms, what I would say are the narratives or the paradigms, because you just, you get used to seeing things and, you know, conflicting views on things as you move around. It makes you question, okay, well, what is the real answer here, given the diversity of views as you move around and you're exposed to that? I think, you know, if you're in a constant environment, sometimes you think there's the truth or the paradigm is the truth. It's actually hard to see that or to see that it's not until you get outside of that. And I think this movement certainly opened my eyes to, you know, there are multiple sides to every story. You need to be very cognizant of that. And typically, no single right way of looking at things. It's instead the context

you find yourself in. I think that's really, really important. Do you think it has made you better able to see the conflicting views on climate? It certainly makes me more sensitive to understanding, looking underneath the hood, so to speak, and really understanding what's going on, what's drivers, what are the, you know, how do you think about these things? So, you know, again, I don't come to it with a view that there's a right and a wrong. You come to it with a view of let's understand this. And that's the way I grew up. That's the way I was educated. And that's where my life experience has taught me. And I certainly have brought that to the company. Frankly, the company's philosophy is very aligned with that same experience.

I think, again, because most people in this company have had, if not before joining the company, certainly in joining the company, have had this multiple experiences moving around the world and seeing it for themselves. I think that you do find some, I'd say synergies or some, you know, harmony in terms of how we think about things. Now, do you think it has, what do you think it's done for your kind of resilience? I mean, you are, you know, running a company, there's been a lot of criticism, you get a lot of critical questions from, you know from journalists and so on. Do you think it has added to your resilience and your grit? Well, no doubt about it. I think anybody who's moved around, particularly at a young age through adolescence, I think most people recognize those are tough times in kids' lives with peer pressure.

And certainly today, you see a lot of that. But I think moving around and from one place to the other within the states and then as I moved internationally, you know, there is a lot of an outsider tends to draw a lot of attraction, a lot of it not always positive. So I think it does come back to you generate or you develop a sense of self and value, and you gotta be a little resilient in terms of the criticism and the bullying and things that kind of happen to young kids.

And I think just growing up, it happens to everybody, I think, generally speaking, and I think as you move around, it just exacerbates that challenge of growing up. And so I think it does make you tougher. I think it does move around, it just exacerbates that challenge of growing up. And so I think it does make you tougher. I think it does, you know, improve your resilience. If we kick off on the energy transition, so the world now uses roughly 100 million barrels of oil per day. And in Norway, you know, 80% of cars are now electric. Yet it just seems so hard to get the oil reliability down.

Why is it so difficult? Well, I think, you know, oil has played such an important role in today's society because of the benefits that it brings. I mean, from an energy perspective, it is a very dense source of energy. And so the products that you produce from crude oil have a functionality that is very hard to replicate in terms of the volume and the energy that you get from a specific volume. It's very available. It's affordable. It's transportable. And so there are a lot of elements or parameters around oil that make the utility of it extremely high. When you go beyond it as an energy source and just look at the basic makeup of oil,

the hydrogens and the carbons, the molecules in oil provide a foundation to make lots of different products that society needs and values. And so it has tremendous utility above and beyond just its use as a fuel. And so I think it's just a resource that has broad applicability and a lot of very positive benefits. Do you think we have a climate problem? Sure. Yeah. benefits. Do you think we have a climate problem? Sure. Yeah. I mean, I think the data has demonstrated that the use of fossil fuels, oil, gas, and coal, and the emissions of that associated with that is contributing to the risk of climate change, changing the climate. So I think

it's clear. So when you look at the whole energy system, let's say 10, 20 years hence, what is it going to look like? Well, I think the challenge here is we focus on the point around climate change and the emissions and the costs associated with the use of today's energy system and the emissions associated with it. You've got to, at the same time, though, as you're thinking about how things are going to change, be very cognizant of the benefits and recognizing the benefits it's provided to society. And as you move to change the energy system and reduce emissions, you've got to, at the same time, think about how you continue to meet the other needs of society. So it is a multi-dimension challenge, a lot of give and takes. And the challenge we have is finding alternatives that have the same utility,

the same affordability, the same availability. That's been the challenge here. And I think if you look at then the cost of that transition and society's ability to bear that cost. That's been a huge challenge here. I think we'll continue to make progress, but it won't be at the rate and pace that I think society's objectives reflect. And then I think the question is longer term, do we find as a society better technologies, improvements in technologies that lower that cost, improve availability to meet those other needs while addressing the emissions.

And I think, frankly, that's a question that hasn't been addressed or we don't have the answers to yet. We're in the discovery mode. We're in the research and development mode. And unfortunately, I don't think we've put enough, society as a whole, has put enough emphasis in that space and coming up with the additional solutions. We got very focused early on, you know, wind and solar and electrification. And no doubt, those are important technologies. They're going to play an important role. They're necessary,

but nowhere near sufficient. We've been too focused on that without enough emphasis on the other solutions that are required and the work that we need to do to find those solutions. Many of your competitors have spent a lot more money on wind and solar. Why have you not done that? Well, we've looked at it from the standpoint of, first of all, what do we bring to that space? As a public company with shareholders' money, my view is we've got to bring something unique there to deliver a return to our shareholders. I would say, fundamentally, if you look at what we do as a company, what we've talked about as being an energy company, we have one of the largest chemical companies in the world. And if you look at fundamentally our core competitive advantages is in managing and

transforming molecules, hydrogen and carbon molecules. And so if you look at the history and what we've done and the progress we've made, it's been in our ability from a technology standpoint to better manipulate, manage, and transform molecules to make products that society needs. That's where we've been focused and continue to stay focused. And if you look at these additional solutions that I referenced, what the world needs, our capabilities in that molecule space translate directly to opportunities with these new solutions.

So think carbon capture and storage, think hydrogen, think biofuels, all of those recognized by credible third parties are going to be needed as part of the solution. We think we can bring something to bear there, bring an advantage to society, offer advances that are going to help

drive solutions that address the risk of climate change and at the same time generate unique value for our shareholders. We think that makes more sense. At the end of the day, we're a molecule company, not an electron company. Do you think the large integrated energy companies are not the right ones to run wind and solar? I think you need to focus on the skills and capabilities, the competitive advantages you bring to bear. If it's just a checkbook, I think there are a lot of people who have checkbooks and a lot of people can put money in this space. The standard that we hold ourselves to is making sure that we can

bring something unique to that space, that we can add value that others would be challenged to bring. And I think our technology capabilities certainly, I think, lend themselves to these other solution spaces, which are going to play a really critical role. Our ability to scale things up and to make technologies work at the scale required play a really important role here. Our ability to start businesses from scratch. You think about when we went into Papua New Guinea, when we go into Mozambique, went into Guyana, you know, we're basically working with governments to establish brand new industries in those countries. There is no carbon industry today, but we're hard at work to establish that value chain and working with governments around the world to do that. of things that we bring into this space that I think is unique to our company and really important

for long-term successful solutions in this space, solutions that are desperately needed. Are you surprised by the low returns that some of your competitors are accepting for some of the projects in Wind & Solar? I think what we're challenging ourselves on is if we bring a real advantage to this space, then we ought to be able to generate above average industry-leading returns. And that's the criteria that we're using. And if we can't do that, then it says to me, you're not bringing a unique, valuable advantage to this space. And therefore, you got to look for other areas.

And so that's the standard we hold ourselves to. We don't have to focus on a solution and give up returns, or focus on returns and give up a solution. We can do both of these things. The projects that we're pursuing are allowing us to do both, to generate solutions, invest in solutions, and generate returns. Why are you focusing so much on carbon capture and storage? I think it's a critical element of the solution set. And it's not just ExxonMobil. I think if you step back, the IEA, IPCC, a lot of credible third parties in looking at

the world and the solutions needed to rapidly address the emissions, carbon capture is going to play a really important role. It is a technology that exists today. It's one that we have a lot of experience in. In fact, as a company, we've captured more anthropogenic CO2 than any other company on the planet. So we're pretty familiar with it. It's been used in the past for different reasons, but the technology remains the same. The cost is high when you start

applying it to basically sources, dilute sources of CO2. And that's one of the technical challenges associated with that. We've got work to do to make that technology more economic for more dilute sources of CO2, but that's work that we've got ongoing. I think it's going to play a critical role. And if you just step back and think about it, does it make sense? I mean, at the end of the day, the issue that we're trying to deal with are emissions and the reduction of emissions. People have taken a shortcut. There's been a narrative that's been progressed that says, you know, what that means is you got to get rid of oil and gas. And that may be true in some applications. But if you can preserve the

infrastructure, the industrial processes that we have today, and reduce the emissions or eliminate the emissions, that's a much lower cost solution for society. So I think the challenge here is stay focused on the problem statement, which is reduction of emissions and elimination of emissions. on the problem statement, which is reduction of emissions and elimination of emissions. How do you do that? Like I said, in some cases that means eliminating the combustion of oil and gas or oil products. In other cases, it may mean eliminating the emissions

associated with that combustion. We're kind of agnostic as to which way it goes. It's just looking for what makes the most economic sense. What's the lowest costs for society? How do you continue to meet these other needs, the benefits that today people are enjoying while eliminating the cost? And that's what our focus has been on.

So you plan to invest 15% of your new investments in low-carbon solutions. How do you get to that number? What kind of discussion do you have internally at the board level to get to that number? It's really, we're not limiting it. We don't start with a budget. We start with the opportunity set. And so I would tell you, people, and you just made the reference to the relative size of

that investment, but I would also put that in the context of the relative size of those businesses as they exist today. The oil and gas markets are enormous today. We represent a fairly small position in those markets, but they are depleting resources. And so as the world works on the transition, there is a continuing need for oil and gas. And as we produce that and that resource depletes, investments are needed to offset that. And our investment in that space is reflective of our market position and the need to kind of offset that depletion and continue to meet society's needs. While we work on this new industry, the new business of carbon reduction, which today is nascent, is extremely small. And so we're working hard to develop the opportunity set, leveraging the capabilities

that I referenced earlier. But the opportunity set is extremely limited. And there is today limited policy around the world that is incentivizing that broader set of solution sets. There really is no market today for carbon reduction. There are very few companies who are willing to pay for lower carbon intense products. And so there's not a market that's driving force that's driving things. And the technology, as I said,

most cases remains high, cost is high. And so we've got to work on bringing that down. And frankly, the policies that high, and so we've got to work on bringing that down. And frankly, the policies that are being put in place today are incentivizing some of those investments. And the way I look at that is it's a good catalyst to get us started. We've got to find a way to get on this path and start down the road. But ultimately, a market's going to have to develop. The government cannot subsidize this business in perpetuity. It can act to accelerate it.

It can catalyze the needed investments. It can start industries down this technology curve to get us going. But ultimately, markets are going to have to develop. And I would say we're at very early stages of that. And frankly, if you look at the investments that we are making, I'd say that we're actually kind of ahead of a pack in looking at these other opportunities and investments that are required to advance those. Which of the new technologies impress you the most? There's no silver bullet in this solution set. It's really going to be a mix of solutions that are needed. And that mix is actually going to change as you move around the world and look at the context of the applications.

I'll just give you an example. A lot of discussion today about blue or green hydrogen, and a lot of folks are very focused on the green hydrogen equation. In my mind, we're fairly color agnostic and instead look at where does it make the most sense? Where can you get the most carbon reduction for the least cost? Because that's the right answer for society. In the Gulf Coast of the U.S., where you have abundant methane and abundant storage, blue hydrogen, I think, makes a lot more sense. You can get a lot more reduction for a less cost, and therefore you can advance further down the emissions reduction curve quicker by focusing on blue hydrogen. If you move to Europe, where you don't have abundant and cheap methane, green hydrogen can make a lot more sense in the right set of circumstances with the right

solar intensity and wind intensity. And so I think as you move around the world, the solution is going to change depending on the endowments of the area that you're working in. So we tend to look at it as it's an all of the above. We don't have a good answer in any one place. And so the world should be pursuing solutions in all of the areas, not just our industry, but more broadly in energy, nuclear and other capabilities, I think are going to be absolutely critical to basically ultimately achieving the objective the world's trying to meet. What is your view on nuclear? I think it's going to be a critical part of the solution set. And what about other breakthroughs, such as fusion? When do you think we'll see results of that? Well, I think fusion, it's like a lot of these technologies, fusions.

It was encouraging to see the recent breakthrough. But I also think, you know, developing, going from where we're at in a lab to something that you can commercially apply at scale. You know, the time horizon for these things are a lot longer than I think people realize. longer than I think people realize. And so I think while it's encouraging, I think, you know, we've got a lot of other solutions we have to pursue in the short to medium term to kind of fill that gap. And so I'm hopeful, but I'm also, I think, at the same time, recognize the practical challenges of scaling up brand new technologies and getting them to a commercial state that works at scale. People don't understand, I think, generally, the amount of investments that are going to

be required to basically replace today's existing energy system. It is enormous. And therefore, I think, again, it's all of the above. Cost is going to be a challenge for society to bear that cost to reduce emissions. And so finding the cheapest applications that reduce the most emissions quickly is a really important priority in the short term. There's been a lot of discussions about scope three emissions. And just for the list of scope three emissions is the emissions that is caused when you use your products, right? So when you drive your cars and so on.

And we as shareholders will support a proposal at the AGM where we ask you to come up with scope three targets. Now, you have a different view on this. Can you please explain? Sure. I think the GHG protocols and the scope one, two, and three emissions that you referenced, it's an important measure when used at the right level. I think the GHG protocol and thinking about your emissions and scope three emissions in particular is good to use at a macro level to understand for an economy, a society, where are the emissions coming from and how do you focus on addressing those emissions. But when you take a scope three

and start to narrow that down and put it on specific companies, I think there are a lot of unintended consequences that result from that. There are better ways of holding companies accountable for their emission profiles and the intensity of their emissions. And I think that's important. So I think it's important that companies understand what they're doing in this space and how they're contributing. But I also think it's important to hold them accountable for those emissions. But I also think it's important to have the right measures in place. And I'll give you an example of some of the unintended consequences associated

with scope three targets for a company like ExxonMobil. We produce LNG, liquefied natural gas. For every ton of natural gas that we produce and ship typically to Asia, we back out coal, and therefore we reduce emissions and so growing our lng business today certainly in the medium term short to medium term is absolutely critical to backing out coal and reducing the world's emissions while we're working on these other solution sets while we're working on uh the transition uh if i have a scope 3 target um, every ton of LNG I produce is more scope three emissions for me as a company. And so if I want to meet my objectives of reducing scope three, I stop growing

LNG and the world burns more coal. That's not a good answer for society. Likewise, scope three is an absolute measure. It doesn't take account size. And so the bigger the company, the more penalized you are on your emissions. But the reality is we ought to be focused on companies who are effective at managing their emissions, have a low emissions intensity. And for as long as products are needed, oil and gas products are needed, society ought to be preferencing companies that can produce those products at the lowest emissions possible. So if I look at my refining circuit today, we're one of the largest refiners, IOC company, international oil companies that have refining.

If you look at the benchmarking that's been done by third parties, we have some of the lowest emissions intensity refineries in the world. And so from our perspective, as long as the world needs diesel and gasoline and other petroleum products produced for refining, you want a company that has low emissions intensity. We're one of those companies. If we stop producing diesel and gasoline, the world demand doesn't change. Somebody else will meet that.

And almost by definition, you're taking one of the most efficient emissions, lowest emissions intense companies out of the mix for somebody else, probably with less transparency and certainly higher emissions associated with that production. And so it doesn't make sense to do that. So we've been advocating for kind of a lifecycle analysis, looking at carbon intensity for the value chain and how we contribute to that space.

We think that's a better way of holding companies accountable. We are holding ourselves accountable to our emissions intensity and driving our emissions intensity down, both our overall CO2 emissions intensity as well as methane. And I think that's a much more effective way. It still drives the accountability. It still drives the focus for the company.

But it doesn't come along with the unintended consequences that the scope three target does. Moving on to energy policy. So a very, very different approach in the US versus Europe. Tell us, how do you in the US versus Europe. Tell us, how do you see the two different policies working? Well, I would just say, what the IRA has tried to do is incentivize a broader industry to make investments and reduce emissions intensity. And it's given, I think, in most cases, carbon intensity standards. So it's leaving it up to the industry to try to figure out how to meet those standards and not pick winners and losers, but instead, or pick technology-specific answers, and instead just let the market work to deliver

on the objective of reducing emissions and lowering emissions intensity. And that's kind of what I'd say is the carrot approach. The stick approach, which is closer to the European, is one, I think, very prescriptive in terms of what they're trying. They're actually trying to micromanage the solution set based on what they know today. And frankly, we're at such an early stage. I think it's a huge mistake to be picking winners and losers and focusing on specific technologies, but instead should be looking more broadly at letting the markets figure out which solutions provide the most emissions reductions for the lowest cost. I think that's really clear. The other thing they're doing is penalizing companies or taxing them. So it's more of a stick approach.

I mean, one of the issues there, frankly, is you start to drive industry out of the economy. And so it has significant consequences associated with that, with penalizing companies for the emissions associated with making products that society still needs. Way too much emphasis on the supply side of the equation, not enough on the demand side of the equation. So as long as society continues to demand projects, the supply is going to come from somewhere. Taking it out of Europe and penalizing European companies or companies that are located in Europe for making those products just shifts that to some other jurisdiction.

But ultimately, as long as the demand is sustained uh prices go up but consumers and society continue to use those products because today we don't have good alternatives now um whilst talking about europe we have to talk about uh your experience in uh in norway because you had you had license 001, right? And I believe that's now part of Johan Svadrup. But you left the Norwegian shelf. Why was that? Well, I think it's part of the broader approach that we've taken.

It's continuing to look at where we can best apply our limited resources for the greatest advantage to shareholders. best apply our limited resources for the greatest advantage to shareholders. So we don't start off by looking at any one place and drawing an opinion on that resource or that country. We instead look at what's the opportunities that look like? Where can we bring the most value? If we have assets or resources where others are better positioned to extract more value than we think we can, or where we have the resources, available resources, to dedicate to extract that value, that opens up an opportunity to improve, grow value by monetizing it today and allowing

somebody to take those resources and focus their efforts in that space. And then we focus ours in other areas. How much time do you spend on geopolitics? Every day, every day. I mean, our business spans the world, right? And so I think it's a really important part of managing this business. The products that we make play such an important role in societies. We saw that recently in Europe with the Russian invasion of Ukraine and the disruption that it brought to the energy markets and how that then affected people all through Europe and impacted

their ability to, their lifestyles and their standards of living. And so I think the national security aspects of energy come into play here. So rightfully so, governments all around the world are very focused in this space. And many of them are chasing different policies to try to manage the competing forces around the things that we do. And so it's a really important part of managing this company and our businesses as you look around the world. Your predecessor went into politics. Will you do that too?

I have no plans to do that. Well, I'm sure it would be a good one. You come across as a very good politician, I have to admit. No, that actually comes, I'm going to take that as a criticism. No, no, no, you are diplomatic, right? Well, listen, I think, you know, I think some might take exception to that characterization. We tend to stand by the principles and the fundamentals that we think are right. And if you look at our history and even my short tenure in this job, the challenges that we face, the criticism we've faced has been based on, you know,

doing what we think is right to balance the needs and to face the criticism and the headwinds that come along with that. I don't find typically that that works well in the political arena. But for us, given the long investment horizons for the company, the significance of what we do, taking a long-term view and sticking to the fundamentals of that long-term view are critically important. And we don't try to swing with the ups and downs, but instead try to do the right thing

for the right reasons in the right way. And we think ultimately, if it's not popular at one point in time, that with the passage of time, that those elements become clearer to people and then they get aligned with it. So I can give you one example. In a six-month period, I testified to Congress.

The first testimony I gave was with the pressure of trying to reduce the amount of investments we were making in oil and gas. Six months later, it was another congressional testimony explaining why we weren't investing more within a six-month period. So from my standpoint, you can't move back and forth and switch so closely given the dynamics of the investment cycle and what's required to make these big investments. So you've got to take a long-term view, stay very focused on the fundamentals, and try to drive the right decisions for the long term. That doesn't, again, lend itself to political cycles. Continuing on shift and heading, I believe you are just back from the Microsoft CEO Summit in Seattle, which, of course, was about AI. Now, how is AI going to change Exxon?

Well, that's a tough question to answer because I think we're on a very steep part of the curve with respect to evolutions in AI and the direction that AI is heading. I think it's going to have a profound impact, I think, on the world and all industries, including ourselves. At the heart of things, as I mentioned before, we're a technology company. And I think using AI and applying that to our business and the different technical aspects that we do are going to have huge benefits. I think, you know, fundamentally, the advances in AR are going to allow us to high-grade the work that we ask our folks to do. You know, a lot of the things we can now automate. When you say high-grade, you mean do less boring stuff? Yeah, that then frees our people up to focus on the higher value,

I think more intellectually challenging opportunity sets and improve. I think it's going to shorten the time cycle of innovation. It's going to shorten the time cycle for implementation. And so I think what's generally going to happen is we're going to work on harder problems and we're going to solve them faster is a simple way of thinking about that. And I think the scope as to where this will apply itself, frankly, is under development. And I think we're pretty excited about the opportunity space here. We recently, when we reorganized on May 1st and created our global business solutions

group, our supply chain group, we made a decision to move our information technology group into our research and technology organization. And so we've much more closely aligned what we're doing in the IT space and AI with our technology organization and the engineering and the research work that we do there. I think that's going to pay huge dividends. And that's a reflection of the recognition of the role that that can play in driving this business and the success that we can have. There are many people in the industry who really admire your corporate culture.

How would you define the Exxon corporate culture? Well, I think it starts with the values that we work towards. And it's actually been the foundation of the company for a long, long time. But integrity is a really important part of how we run this company and making sure that we do the right things for the right reasons in the right way, as I mentioned before. We have a value of care, caring for each other, caring about the impact that we have on society and the environment. We have a value of courage and basically standing up for the things that we believe in and standing on our principles. We have a value of resilience,

of doing the tough things and not shying away from the hard conversations and the hard work. I think that value system underpins the success that we've had in the company. I think that value system combined with this focus on the fundamentals, we recognize that as a company, we're here to meet the needs of society. We don't define them. And if you think about our role in the energy system, we're at best 3%, probably closer to 2% of the world's energy system. So we're not moving this industry.

We're not moving it. We're a participant in it. We're a price taker. So as the needs evolve, as they have since we've started, if you think back when this company was formed, we were making kerosene to replace whale oil for lighting. And then with time, the electric, you know, electric light came along. We moved into making gasoline. And if you look across our history as a company, we've always evolved relying on these fundamental capabilities in terms of molecule management to meet society's needs.

We formed our chemical business, and the portfolio of products that we make out of that business continue to grow. And so my view is you're going to continue to see that evolution, and it comes from focusing on these very fundamental, what we're good at, what the demands of society are, and how we can meet those and meet the multitude of demands. I think that underpins the success that we've had as a company. I believe that going back to the 60s, you learned a lot from Japanese companies when it came to quality assurance and quality controls. Who do you learn from now? I think, you know, it's a collection depending on which part of the business that we're looking at. So just take a couple of examples. If you look at what we're trying to do in safety and the improvement and our safe operations,

you know, we're engaging with the airline industry, with the nuclear industry, with our other peers, really challenging ourselves to, you know, what does it take to raise the bar in safety and, you know, taking the best ideas that are out there and translating them so they're relevant for us within the company. Technology is such a critical foundational element for our company and the evolution of our company and frankly our success over time. And so while we do a lot of technology internally, we also do a lot of work externally in working with the national labs here in the U.S. We have universities that we work with around the world, and we're also to and understanding what the art of the possible is, how people are thinking about things.

I think we're fairly humble in our understanding of how things are going to develop and what the right answer is. I think what we've found in our company is very difficult to predict where things are going to go. Very important to stay open to the range of possibilities and to make sure we're positioning ourselves so that we're successful, irrespective of which way things evolve. So if I now apply for a job in your company, how would you figure out whether I'm a good fit? What kind of questions do you ask me? Well, I don't interview too many people joining the company, to tell you the truth.

I actually, at the senior level, which is where I get engaged, we try to make sure that the value systems are aligned. And so the values that I articulated earlier, asking questions to understand that fit. And I think as you go further down at lower levels within the company, that's certainly an important part, making sure that the value system that people are bringing into this space are aligned. I think that's probably one of the most important things for a successful career is making sure that the things that you value, the things that you're looking for in a company, that that company is aligned with that, and that the opportunity set at the company

matches what the individuals are looking for. Our investment cycles in this industry spanned a good decade, and so having that perspective of a long-term approach is really critical. The beauty of coming to work for ExxonMobil is given the scale and the number of businesses that we have, you can have a whole career and never do the same job twice. You know, you can work in our specialty chemicals business and sell

tachyfires that go into adhesives. You can run pipeline businesses, trading organizations, refinery, manufacturing facilities. You can be in our upstream and offshore platforms. There's just a variety of different things you can do within this company. And you get to move from one job to the other, from one part of the industry to the other, and never leave the company. So always carry your equity with you. So that's, I think, a unique value proposition that we have. What would be your best advice to young people? I think, you know, to thy own self be true. You know, you really, I think, to me, the success, a successful career starts with understanding what is it that you're looking for in life?

What is it that satisfies you? And I think a successful career isn't about job titles. It's not about the amount of money you make. It's about fulfillment and satisfaction. And so that starts with understanding what do you find fulfilling? What is it that satisfies you? And having a job that you find fulfilling and satisfying motivates you to work harder. And that harder work leads to better results. And those better results leads to more opportunities. That's certainly the advice that I gave to my kids is

don't focus on how much money you can make. Focus on the things that you get satisfaction from and then find a company that's aligned with the way you think about things, at least at that early stage in your life, and give you the opportunity to work on the things that you find fulfilling. You mentioned hard work. We had Jensen Huang of Navidia on recently, and he said, Nikolai, you have hard work, and then you have insanely hard work. Now, where are you on that scale? know. I mean, at this job, at this level, you dedicate a lot of time to the job and takes a lot of what I would say is critical thinking. I know there's always this discussion about work-life balance. And I think, you know, frankly, if you do what I just talked about in

terms of finding a job that fulfills you, that satisfies you, I mean, work is part of life. in terms of finding a job that fulfills you, that satisfies you. I mean, work is part of life. It's not, in my mind, a tradeoff that you're making. It's the question of how that work contributes to your life and how fulfilling do you find it. And frankly, I've always used the analogy of sports teams. If you think about athletes, they dedicate a tremendous amount of their life to the sport that they play, and they dedicate themselves to that sport.

And I think, you know, people never question the amount of time that somebody spends, you know, pursuing a sport because they recognize there's a love of that sport. And that's, you know, that's fulfilling for those athletes. I actually think if you find the right job, if you pursue the right career, there's a very similar analogy. People don't question how much time an athlete spends practicing and getting ready for a game and nobody questions. I think most athletes like challenging games. I think, you know, certainly from my career coming up through it, I've liked the challenges and the thinking required. And okay, the time that you engage in that grows as your responsibility grows, but it's also part of that fulfillment in life's journey. How fulfilling is it to be CEO of Exxon?

You know, this may sound strange to you. I don't really judge myself for the work that I do with respect to the title that I have. I think the challenges I get to work on here, the role that I have in helping steward this company and steer and direct it is very fulfilling. It's very fulfilling. It's very satisfying. I'm quite humbled and honored to have the job because, I mean, we're a company that's been around for over 140 years. And as you pointed out earlier, we've been fairly successful over that timeframe. I think we do really important work. And I think the values that we have as a company and the focus on just do the right thing for the right reasons in the right way. I think, you know, to me, there's a history here and a legacy that I feel a tremendous sense of obligation to perpetuate and to make the company stronger. As I said earlier, you know, as I've come through the company, the expectation of every

job you have is to leave it better than you found it. That's for all of our people throughout our company. And I've stepped into this job with the same mindset. Everybody who does the job tackles the challenges in front of them during that time frame and leave the company in a better position. That's what I'm working hard to do is to leave the company in a better position. But frankly, this organization, my expectation is this organization will outlive me. And it's actually the contribution of all of us, all the way down to the people who are working in the plants, turning the valves that actually make ExxonMobil what it is and deliver the value that we deliver.

I just have the unique opportunity to kind of help steer and direct that. But it's really the organizational contribution that ultimately makes the difference in the bottom line and ultimately the success of the company. Well, Darren, since you live in Texas, last question here. Do you barbecue? Absolutely. I barbecue, I smoke. That's my job in our family.

I do all the outside cooking. What's your favorite cut? I like ribeye steaks. Same here. Same here. Good choice. Darren, it's been a real pleasure having you on here. You go and work on your ribeye, and I will do the same.

And I look forward to staying in touch. All right. Well, very nice talking to you. Thanks for the opportunity. pleasure having you on here you go and work on your way by and i will do the same and uh look forward to staying in touch all right well very nice talking to you thanks for the opportunity good good conversation thank you