Exxon Mobil and Shell’s Q4 Financial Outlook and Hydrogen Innovation
Source：Hydrogen Fuel News
Exxon Mobil Faces $1.75 Billion Earnings Reduction in Q4 2024
Exxon Mobil has revised its financial projections for the fourth quarter of 2024, anticipating a $1.75 billion reduction in earnings. This is largely attributed to weaker refining profits and broader operational challenges. While upstream asset sales contributed approximately $400 million to earnings, impairments of $600 million in other areas offset these gains. Additionally, the company expects refining margins to lower profits by $300-$700 million, while timing effects could lead to a further $500-$900 million decline.
Falling crude oil prices and moderate fuel demand played key roles in Exxon’s financial downturn. However, higher U.S. natural gas prices provided some relief. The chemical division also shows signs of wear, with earnings dropping by $400 million when compared to the previous quarter. The company plans to release its complete financial results on January 31, 2025.
Shell Adjusts LNG Production Forecast But Expands Hydrogen Investments
Shell has also tempered its financial expectations for Q4 2024. The energy giant forecasts liquefied natural gas (LNG) production to range between 6.8 and 7.2 million metric tons, influenced by reduced feedgas deliveries and fewer cargo shipments. Weaker oil, gas, and chemical trading results due to tepid seasonal demand and expiring hedging contracts further contributed to the outlook. Additionally, Shell expects impairments amounting to $1.5-$3 billion, up to $1.2 billion of which is tied to its renewables division. Despite these challenges, analysts believe there will be minimal impact on shareholder returns, with full-year results expected on January 30, 2025.
Hydrogen at the Core of Shell’s Strategy
Amid these financial pressures, Shell continues to prioritize long-term investments in clean energy, notably renewable hydrogen. Its flagship REFHYNE II project in Germany focuses on advancing green hydrogen production on a scalable level. The 100-megawatt electrolyzer, slated for completion in 2027, is expected to produce 44,000 kilograms of renewable hydrogen daily. This project is central to Shell’s commitment to reducing carbon intensity across operations and markets. By integrating electrolysis technology, the energy giant aims to provide emission-free hydrogen for industries and transportation.
Shell has allocated between $10 and $15 billion toward low-carbon energy technologies from 2023 to 2025. This portfolio includes contributions to renewable power generation, electric vehicle charging infrastructure, and carbon capture initiatives, demonstrating a diversified approach to reducing emissions.
Exxon Mobil Pursues the World’s Largest Low-Carbon Hydrogen Facility
Exxon Mobil, while facing earnings constraints, underscores its commitment to decarbonization technologies. Central to its strategy is the construction of what is expected to be the world’s largest low-carbon hydrogen production facility. Located at the Baytown, Texas complex, the plant aims to generate 1 billion cubic feet of blue hydrogen per day while capturing more than 98% of associated CO2 emissions.
The Baytown facility, which includes partnerships such as Air Liquide for feedstock integration, exemplifies Exxon’s forward-looking efforts. The project promises to supply not only Exxon’s industrial hubs but also U.S. Gulf Coast customers aiming to decarbonize their operations. Designed to produce both hydrogen and a million tons of ammonia annually, the facility is projected to begin operations in 2028.
Exxon Mobil is already working on hydrogen supply agreements, such as its joint exploration efforts with Japan’s JERA, which would allow for hydrogen and ammonia shipping to international markets. Additionally, successful front-end engineering by Technip Energies provides confidence in the project’s scalability.
Connecting the Financial Outlook with Hydrogen Investments
For both Exxon Mobil and Shell, falling traditional energy margins reveal compelling reasons to double down on hydrogen-based solutions. While current market conditions spotlight challenges in refining and LNG sectors, hydrogen innovation positions these corporations as key players in the global shift toward clean energy. Expanded hydrogen capabilities could also mitigate investor concerns about declining oil and gas returns by demonstrating a viable path to future growth.
However, both companies face hurdles to achieving their hydrogen ambitions. For Shell, delayed profitability in renewable assets raises questions about balancing innovation and shareholder interests. Exxon Mobil, on the other hand, remains reliant on policy support for carbon capture and hydrogen projects. Long-term success will hinge on how effectively these corporations integrate regulatory incentives, demand growth, and infrastructure readiness into their plans.
The Role of Hydrogen in Transforming Energy Supply Chains
Hydrogen represents a bridge to industrial decarbonization, addressing areas like heavy industry, transportation, and high-temperature processes, which are difficult to electrify. By prioritizing projects like Baytown and REFHYNE II, these companies are advancing scalable and practical applications of hydrogen.
Currently, both blue and green hydrogen technologies offer solutions for reducing carbon emissions. Blue hydrogen, reliant on capturing CO2 during production, provides an immediate pathway to cleaner fuel development. Meanwhile, green hydrogen, produced using renewable energy, offers longer-term environmental benefits ideal for growing hydrogen economies in Europe and beyond.
How These Developments Apply Now
Hydrogen technology isn’t just about future milestones—it has applications today. Integrating hydrogen into existing chemical and energy production infrastructure ensures smoother transitions for industrial sectors aiming to lower emissions. Policies encouraging industrial hydrogen adoption could close gaps between supply and demand over the next decade.
For timelines, Shell’s REFHYNE II is expected to begin commercial operation by 2027, delivering key earnings for further expansions in 2030. Exxon Mobil’s Baytown plant offers one of the industry’s largest carbon capture-enabled hydrogen offerings by 2028, setting a standard for scalability. While these projects won’t solve immediate energy challenges, they provide foundational steps toward a cleaner energy economy.
Hydrogen innovation bridges the gap between current fossil-fuel-reliant systems and the sustainable frameworks of tomorrow. From retrofitting industrial plants to fueling cleaner mobility, the time to act on these advancements is now. Encouraging collaboration and policy incentives will ensure that these technologies not only remain viable but thrive in reshaping our global energy landscape.