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Leaked Study Shows Exxon, Partners Overspent by $138 Billion

An internal analysis performed by Exxon in 2020 suggested mismanagement by operators and poor planning were behind cost overruns

Fawley Oil Refinery As Commodity Likely To Avoid Repeat Negative Price Shock
Photographer: Luke MacGregor/Bloomberg

Oil and natural gas projects that Exxon Mobil Corp. invested in between 1998 and 2017 ended up costing $138 billion more than early-stage estimates, potentially due to mismanagement by operators and poor planning, according to an internal analysis seen by Bloomberg.

The 2020 study, reviewing 110 projects in which Exxon took a stake over two decades, suggested two theories for the overspend: the sheer complexity of large-scale developments and “human biases” that resulted in “overoptimistic” plans designed to win approval from senior executives for funding. Twenty-one of the projects accounted for 93% of the overspend, according to the analysis. The worst ended up costing more than six times an early estimate.