Clearly, as a direct consequence of our shortage theme this week, ExxonMobil announces a large new complex in China is through FID. This may be the company rushing something ahead before tighter restrictions are imposed or it may be an indication that with a 2060 net-zero pledge China is going to let things slide for a while. We would not be surprised to see ExxonMobil face some bad PR around this project if there is not some emission abatement plan with it. The facility will give ExxonMobil some further integration – effectively consuming equity hydrocarbons – but, if the company is setting itself up for criticism for investing in jurisdictions with lower emissions standards, this could backfire. It is also a very counter-cyclical investment given the poor profitability seen in the region right now (chart below) and as we discussed in our Sunday Piece - Waiting For The Big One – Is A Chemical Mega-Cycle Ahead?.
