ExxonMobil Eliminates 'Sanctuary' Amid Oil Price Decline

ExxonMobil Plans Executive Office Relocation
Consolidating Space into Staff Building
Department Restructuring and Art Auction Cost Reduction Critical

ExxonMobil, the U.S. oil company that posted record-high net profits last year thanks to the surge in international energy prices, has launched a major cost-cutting effort amid the decline in global oil prices.

According to the Wall Street Journal (WSJ) on the 14th (local time), ExxonMobil is reportedly planning to relocate the offices of senior executives from its Dallas headquarters in Texas to its Houston headquarters.

ExxonMobil [Photo by Reuters Yonhap News]

The executive-only offices at the Dallas headquarters were established during the tenure of former Chairman Lee Raymond and cover an area of 1,858 square meters (562 pyeong), decorated with high-end interiors and artworks. When former Chairman Raymond presided over executive meetings here, the Dallas office became known as a special space reserved for a select few executives. ExxonMobil separated the workspace so that regular employees work at the Houston headquarters, while the Dallas office was adorned with luxurious materials to symbolize the company's strength and prestige. Due to its exclusive use by a small number of executives, this space was also nicknamed the "God Pod," meaning "God's space."

WSJ reported, "The interior of the Dallas headquarters is decorated with a top-tier art collection, and personal chefs provide meals for the executives. This space is used only by a few executives and their secretaries and resembles a luxury hotel built in the 1990s."

However, ExxonMobil is reportedly planning to move the executives' offices to the Houston headquarters to cut costs and replace the Dallas office as the new headquarters. Some of the artworks inside the Dallas headquarters have been put up for auction, and unused office spaces in the Houston headquarters will be leased out or sold to optimize space utilization.

In addition, ExxonMobil has recently begun organizational restructuring to reduce costs. Three teams, including those responsible for financial services and talent recruitment benefits, will be merged into a single department called "Global Business Solutions."

The reason ExxonMobil, which achieved a record performance of $55.7 billion (69.7 trillion KRW) last year thanks to high oil prices, is tightening its belt is due to the bleak outlook for the international oil market this year.

Following the Russia-Ukraine war, international oil prices, which once soared to $130 per barrel last year, are currently hovering around $70 per barrel due to concerns over economic slowdowns in the U.S. and China. On the 12th, the June delivery price of West Texas Intermediate (WTI) crude oil on the New York Mercantile Exchange closed at $70.04 per barrel, down $0.83 (1.17%) from the previous session.

Fearing a downturn in the industry this year, ExxonMobil is preparing countermeasures to reduce costs in various areas. In February, the company announced plans to establish its own supply chain to efficiently manage logistics and materials, and by the end of this year, it plans to create a global trading group with international trading companies to jointly sell crude oil, natural gas, and petroleum products.

In an email sent to employees in February, ExxonMobil stated, "We cannot expect the company to last 140 years without continuously striving to adapt to the ever-changing market," and expressed its commitment to cost reduction by saying, "We plan to achieve industry-leading profits by utilizing measures such as integrated department restructuring."