Exxon to move HQ to Houston, merge refining and chemicals

(Bloomberg) — Exxon Mobil Corp. will relocate its corporate headquarters to the Houston area from suburban Dallas and combine its chemical and refining divisions in a major shake-up aimed at reducing costs. 

The oil giant’s top executives, who have worked out of the famous “God Pod” office park in Irving for more than three decades, will make the move about 230 miles (370 kilometers) to the southeast by mid-2023, Exxon said in a statement Monday. The company also will reorganize along three main business lines: upstream, which produces oil and natural gas; product solutions, which makes fuels and chemicals; and its low-carbon division. 

It’s a sweeping overhaul for the company that traces its roots to John D. Rockefeller’s Standard Oil Trust in the 19th century and will bring executives under the same roof as rank-and-file employees in its Houston-area campus. The moves will accelerate Exxon’s aggressive cost-cutting drive, which is on track for $6 billion of savings by 2023, enough to fund about 40% of annual dividend payouts. 

“Closer collaboration and the new streamlined business model will enable the company to grow shareholder value and position ExxonMobil for success through the energy transition,” Chief Executive Officer Darren Woods said in the statement. 

Exxon’s top managers will move into the company’s biggest U.S. office in suburban Spring, Texas, which opened under former CEO Rex Tillerson in 2014. The modern, glass-walled campus is split into several buildings with a central common area adorned with plants and water features. 

It’s not the first time that the Houston campus has absorbed staff from other offices. At the end of last year, Exxon announced plans to close two Houston-area office towers, known as Hughes Landing, after a raft of employee departures. 

Under the three main business units, Exxon will merge support services into a new division called ExxonMobil Technology and Engineering, to be led by Linda DuCharme, who previously led upstream integrated solutions and business development. Karen McKee, the former chemical boss, will run ExxonMobil Product Solutions. 

While Exxon is one of the S&P 500’s top performers in 2022, it’s been a hard few years for the company. The pandemic forced Woods to pivot away from his $200 billion, seven-year growth strategy toward a low-spending model after debt ballooned in 2020. The following year, activist investor Engine No. 1 won support from shareholders to replace a quarter of the company’s board after criticizing its financial performance and approach to climate change. 

Exxon rose 1% to $76.05 at 3:27 p.m. in New York. The company reports fourth-quarter earnings on Tuesday.