ExxonMobil targets first lithium output for 2027
ExxonMobil aims to apply its drilling expertise to lithium production as the top US oil major seeks to become a leading supplier of the key component of electric vehicle (EV) batteries by the end of the decade.
Work is already underway in southwest Arkansas, an area known to hold significant deposits of lithium, where ExxonMobil is targeting first output in 2027. Earlier this year, the company snapped up the rights to 120,000 gross acres of the Smackover formation.
"This landmark project applies decades of ExxonMobil expertise to unlock vast supplies of North American lithium with far fewer environmental impacts than traditional mining operations," said Dan Ammann, president of ExxonMobil Low Carbon Solutions.
Demand for the critical mineral is set to soar in future years as the energy transition gathers pace. Electric vehicles and plug-in hybrids are on track to account for a third of cars and trucks on the road globally in 2050, eroding the market share of gasoline and diesel vehicles, the US Energy Information Administration said last month. Oil producers have expressed an interest in tapping a new technology to accelerate lithium extraction from brine water at lower cost even if it remains unproven at scale.
ExxonMobil will use conventional drilling methods to reach lithium-rich saltwater from reservoirs about 10,000 ft underground. It will then deploy direct lithium extraction (DLE) technology to separate lithium from the saltwater. The lithium will be converted onsite to battery-grade material while the remaining saltwater will be re-injected underground. The technology is seen as more environmentally-friendly than traditional hard-rock mining methods and uses up less land.
Global demand for lithium is expected to quadruple by 2030, and ExxonMobil aims to bolster domestic production given most supplies are currently sourced from outside of North America. By 2030, the company aims to produce enough lithium to supply the needs of more than one million electric vehicles a year. Talks with potential customers, including electric vehicle and battery manufacturers, are underway.
By Stephen Cunningham
Related news posts
Opec+ extends output cuts into 2025
Opec+ extends output cuts into 2025
London, 2 June (Argus) — Opec+ has extended a set of formal and "voluntary" crude production cuts into 2025. The group has decided to keep its formal crude production targets until the end of next year, the Opec secretariat said today following a series of ministerial meetings. This includes what was a 2mn b/d cut to official output quotas agreed in October 2022 . Two sets of "voluntary" cuts by some members of the group — separate from formal production policy — have also been extended. The first, which amounts to 1.66mn b/d, was originally agreed in the first half of 2023 and had been set to run until the end of 2024. It will now be in place until the end of 2025. The second collection of voluntary cuts, which amount to 2.2mn b/d, was announced between June and November last year and had been due to run until the end of this month. These will now be prolonged for another three months until the end of September after which they will be phased out in stages over a 12-month period. The voluntary cuts are only being implemented by some members of Opec+ and fall outside of the group's formal production quotas. They were designed to allow for flexibility and to maintain cohesiveness among the alliance given that some members were already producing well below their official quotas. Today's meetings also resulted in the UAE securing another upgrade to its official production quota, this time by 300,000 b/d. It comes after a previous upwards adjustment of 200,000 b/d came into effect from January 2024. The UAE's new official quota will be gradually phased in starting in January and stand at 3.519mn b/d by September 2025. Another key headline from the Opec+ meetings relates to each individual member's official crude production capacity, from which output quotas are typically calculated. The alliance extended the assessment period allotted to three "independent sources" carrying out capacity evaluations to November 2025 and said new capacities would not come into effect until 2026 — one year behind schedule. The latest agreements appear designed to hand the group flexibility given an array of uncertainties related to supply-demand balances and the macroeconomic outlook. The uncertainty, coupled with geopolitical tensions, has contributed to erratic movement in oil prices over the past couple of months. Ice Brent futures breached the $90/bl mark in early April, up more than 10pc on the month, only to shed most of those gains in the weeks that followed. The front-month Ice Brent contract has been oscillating between $82/bl and $84/bl since the middle of May. By Aydin Calik, Bachar Halabi and Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Oil firms in Kurdistan deny Iraqi PM's contract claims
Oil firms in Kurdistan deny Iraqi PM's contract claims
Dubai, 2 June (Argus) — The Association of the Petroleum Industry of Kurdistan (Apikur) has denied claims by Iraq's prime minister Mohammed Shia al-Sudani that international oil companies (IOCs) operating in the country's semi-autonomous Kurdistan region are not ready to amend their contracts. Apikur points to a statement it made last week that said its members would be willing to consider modifications to existing contracts provided the matter is agreed by Iraq's federal government, the Kurdistan Regional Government (KRG) and the firms themselves. Baghdad had proposed a middle ground agreement that would see it amend its federal budget to allow it to pay IOCs operating in Kurdistan, in return for a compromise with the KRG and the IOCs over the recovery cost for oil produced in the Kurdish region. In an interview with Turkish state news agency Anadolu published on 31 May, al-Sudani said his government has agreed to amend the budget law but IOCs operating in Kurdistan are refusing to amend their existing contracts with the KRG. "We have initiated acceptable settlements and legal solutions after a thorough legal study… The federal budget law requires that the cost of producing one barrel of oil in all fields be within the national average production cost, which is about $8/bl, according to the federal oil ministry," al-Sudani said in the interview. "But the KRG's ministry of natural resources calculates the production cost at about $26/bl within the contracts signed with the operating oil companies," he added. "For these reasons, more work is needed to find a legal solution that prioritises ensuring the rights of Iraq and its people to their wealth." His remarks suggest the two sides still have a significant gap to bridge on this issue. It also pours cold water on a recent call by Iraq's oil ministry for a meeting with its Kurdish counterpart and the IOCs to try to reach a deal and accelerate the restart of northern Iraqi crude exports via Turkey's Mediterranean Ceyhan port. Around 470,000 b/d of crude exports from Iraq's semi-autonomous Kurdistan region have been absent from international markets since March 2023 when Turkey closed the pipeline linking oil fields in northern Iraq to Ceyhan. That move followed an international tribunal ruling which said Turkey had breached a bilateral agreement with Baghdad by allowing Kurdish crude to be exported without the federal government's consent. Iraq's federal government is finding it difficult to strike a balance between repairing its rift with the KRG and complying with its Opec+ commitments. It recently submitted a plan outlining how it will compensate for producing above its target in the first quarter. Opec and the wider Opec+ group are holding ministerial meetings today to discuss output targets and whether to extend the group's current voluntary crude supply cuts into the second half of the year and possibly beyond. By Bachar Halabi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Riyadh monetises Aramco with new share sale
Riyadh monetises Aramco with new share sale
A new share offering offers a cash injection towards Vision 2030 in the face of stagnating oil revenues, and budget deficits, writes Bachar Halabi Dubai, 31 May (Argus) — Riyadh's long-awaited decision to launch a secondary public offering of shares in state-controlled Saudi Aramco could raise up to $13bn for the government's economic diversification plans, at a time when the Opec linchpin's oil production policy is struggling to boost revenues. Aramco plans to sell 1.545bn shares, equivalent to about 0.64pc of the company, in an offering due to kick off on 2 June. The shares are expected to be priced in a range of 26.70-29 riyals ($7.12-7.73) each, which means the firm could raise $12bn at the top end. Proceeds could be as high as $13.1bn if Aramco chooses to exercise an over-allotment option, which would allow the sale of around 1.7bn shares. Aramco's closing share price on 30 May was SR29. Aramco chief executive Amin Nasser said the offering is not only to provide funds to the Saudi state but also to broaden the company's shareholder base among local and international investors. "It also offers us an opportunity to further increase liquidity and to increase global index weighting," he said. Whether further offerings follow in the future will be up to the government. The second offering has already been years in the making. Aramco's record-breaking initial public offering (IPO) in December 2019 raised $29.4bn. The company's mettle — and security risk exposure — was tested just a few months before that event, with an attack on its key Abqaiq oil processing facilities. And the years since the IPO have been a roller coaster ride of risk and opportunity for the oil sector, from the Covid oil demand slump to heightened energy security concerns spurred by Russia's invasion of Ukraine, and the subsequent bifurcation of oil markets under G7 embargoes and price caps on Russian oil. Saudi Arabia — through Aramco — has carried the heaviest load in terms of production cuts by the strengthened Opec+ producer group that emerged from the Covid shock, with individual voluntary reductions alongside group-wide output cuts. And Aramco's secondary offering will test international investment appetite for fossil fuels in the face of growing concerns over global climate targets. Nasser highlights key performance-related reasons that may ensure Aramco is an attractive investment opportunity. The world's largest oil company offers a long-term competitive advantage, in the face of an uncertain oil demand outlook, thanks to the scale, cost efficiency and low carbon intensity of its upstream oil production. Alongside these factors, Aramco claims differentiated growth opportunities in upstream gas, downstream oil, carbon capture, hydrogen and renewables, underpinned by its record planned capital expenditure of $48bn-58bn/yr. Record dividends But most appealing to potential investors may be Aramco's dividend distribution policy. "We distributed a record $98bn in 2023 and we anticipate distributing over $124bn of dividends in 2024. This would represent an almost 30pc increase from 2023," Nasser said. But the higher figure includes a performance-related dividend, reflecting the record profits it made in 2022-23. Whether its financial performance can sustain that additional payout is in question. Proceeds from the offering will help fund Saudi Arabia's Vision 2030 initiative, a government programme of economic, social and cultural diversification that includes hundreds of billions of dollars of investment in giant civil projects. Saudi Arabia recorded a sixth straight quarterly budget deficit in January-March this year as spending outpaced revenue on the back of lower energy prices and curbs on its crude production. The launch of the secondary offering on 2 June coincides with an Opec+ ministers' meeting to decide whether to extend the group's current voluntary crude supply cuts into the second half of the year. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US shale wastewater could be new source of lithium: UoP
US shale wastewater could be new source of lithium: UoP
London, 31 May (Argus) — Wastewater from shale operations in Pennsylvania could provide up to 40pc of US lithium demand if tapped, according to a study from the University of Pittsburgh (UoP). Wastewater produced from oil and gas extraction in the region is rich in lithium and could provide an environmentally sound way to extract lithium without needing large open-pit mines or brine fields, with the added benefit of recycling water resources. "This study estimates that Marcellus Shale-related Li yields have potential to make a significant contribution to US domestic consumption with a set of reasonable, conservative assumptions," according to the research article published in Scientific Reports last month. "Wastewater from oil and gas is a burgeoning issue," National Energy Technology Laboratory researcher Justin Mackey said. "Right now, it's just minimally treated and re-injected. But it has the potential to provide a lot of value. After all, it's been dissolving rocks for hundreds of millions of years — essentially, the water has been mining the subsurface." Large oil companies have recently invested into lithium extraction, potentially bringing their technological knowledge and shale experts and applying them to a new industry. Norwegian state-controlled Equinor recently invested into underground lithium brine extraction in Canada and ExxonMobil expects to produce from brines in Arkansas by 2027. US lithium resources have been expanding with large discoveries in the past few years. Large clay deposits have been found in the McDermitt Caldera region on the Nevada-Oregon border, as well as multiple underground brine resources at the Smackover formation, Arkansas. The former attracted the ExxonMobil investment. The US geological survey estimates US lithium reserves at 1.1mn t, the fifth largest in the world after Chile, Australia, Argentina and China ( see graph ), with negligible production in 2023. By Thomas Kavanagh Global lithium reserves (USGS) t Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more