Darren W. Woods
Chairman and Chief Executive Officer at Exxon Mobil
Good morning. Thanks for joining us today. I'm pleased to be conducting our earnings call from our Houston campus. As of July 1st, our corporate headquarters is now located at the campus, alongside the senior managers of our businesses and centralized organizations. This is the first time in the Company's history that the senior leadership team of the Corporation is located on one site and represents a critical step in continuing the transformation of our business, enabling us to improve collaboration and alignment, and further leverage synergies across our integrated businesses.
The ongoing efforts to structurally improve our Company and drive sustained industry-leading performance was clearly demonstrated in our second quarter results. We delivered earnings of almost $8 billion, two times higher than what we earned in the second quarter of 2018 under comparable industry commodity prices. That doubling of earnings reflects our work in the intervening years to reshape our portfolio of businesses, invest in advantaged projects, and drive a higher level of efficiency and effectiveness in everything we do.
With these results, I'd like to take a moment to recognize our people, starting with all of those that made the move to Houston. I'm sure you know moves like this are not easy and that many personal sacrifices are made. I'm very thankful for all who did this. Their willingness to disrupt their lives for the benefit of our company is a testament to the dedication of our people, whose commitment and hard work underpin all the improvements we are making. I hope our shareholders take comfort in this one small example of our people's commitment to the company and have confidence in their resolve to further strengthen our position as an industry leader in all that we do.
Our achievements this quarter also demonstrate the progress we're making in solving the and equation, meeting the world's needs for energy and essential products and reducing emissions, both our own and others. In the Permian, we set another production record and remain on track for an overall growth in production of 10% this year. As I said last quarter, our growth won't be linear as we execute our development plans that balance and optimize capital efficiency, resource recovery, and production rates. Our priority will remain on driving value, not volumes.
In Guyana, we achieved a record quarterly gross production rate of 380,000 barrels per day. Our team in Guyana continues to deliver excellent operating, environmental, and safety results while optimizing and growing production. In fact, we see the potential to increase the combined gross capacity of these two FPSOs to above 400,000 barrels a day with further bottlenecking, which is nearly a 20% increase above the investment basis and a testament to the ingenuity of our people.
In the Gulf Coast, we continue to profitably grow our business. In the second quarter, we achieved mechanical completion of the Baytown chemical expansion. The project grows volume and improves mix with 750,000 tons per annum of additional performance chemical products. The Baytown expansion is the final Product Solutions component of the Growing the Gulf initiative announced in 2017.
If you recall, the initiative committed to investments of $20 billion over 10 years to capitalize on the US' advantaged resources, economic growth, and strong regional support for our businesses and the jobs we create. 11 of the 13 projects are up and running. The Baytown expansion, after product qualifications, should begin contributing by the fourth quarter. And Golden Pass, the last of our Growing the Gulf projects, should have its first train up at the back end of 2024.
The Growing the Gulf initiative is another example of executing our strategy, investing in advantaged, high-value growth, and delivering on our commitments. Improving the earnings power of our businesses also requires divestments. In the second quarter, we completed the divestment of the Billings refinery. Including this sale, cash proceeds from divestments of non-strategic assets have totaled roughly $2 billion year-to-date.
In advancing our efforts to better leverage corporate scale and integration, we established three new centralized organizations in the quarter, consolidating activities previously embedded in each of our businesses, Global Business Solutions, ExxonMobil Supply Chain, and Global Trading. They're all off to a good start and have clear lines of sight to improve performance and lower cost.
Our Low Carbon Solutions business continues to make progress in building an advantaged, low-cost, high-return business in capturing, transporting, and storing carbon. We announced a CO2 offtake agreement with Nucor, one of North America's largest steel producers. And we signed an agreement to acquire Denbury, which will provide ExxonMobil with the largest owned and operated network of CO2 pipelines in the United States.
Combining Denbury's assets and experience with our capabilities will significantly accelerate and expand our ability to profitably help customers reduce their emissions and allow ExxonMobil to play an even greater role in a thoughtful energy transition. It significantly enhances our competitive position and offers a compelling customer proposition to economically reduce emissions in hard-to-decarbonize heavy industries, which, today, have limited practical options.
Of Denbury's 1,300 miles of CO2 pipeline, roughly 70% are in the Gulf Coast states of Louisiana, Texas, and Mississippi, one of the largest US markets for CO2 reduction and home to some of ExxonMobil's largest integrated refining and chemical sites, and nine of their 10 strategically-located CO2 storage sites are also in this region. We believe the transaction synergies will drive strong growth and returns. A cost-efficient transportation and storage system accelerates CCS deployment for both ExxonMobil and our third-party customers. It supports multiple low carbon value chains, including CCS, hydrogen, ammonia, and biofuels.
Ultimately, we see an opportunity to create a CCS business with the capacity to reduce emissions across the Gulf Coast by up to 100 million tons per year. This transaction will help us do that at a lower cost and faster pace. In fact, we see the potential for a third of the opportunity being actionable in the near-term. Which takes us to our customers. Our latest offtake agreement extends our CCS customer base beyond industrial gas and fertilizers into steel. This project will tie into the same CO2 transportation and storage infrastructure we'll use to serve CF Industries located just 10 miles from Nucor. Focusing on our efforts and investments in areas with concentrated sources of emissions allows us to capture the benefits of scale, reduce our spend per ton of CO2 captured, and improves returns.
Our work with Nucor supports Louisiana's goal of reaching net-zero greenhouse gas emissions by 2050 and it increases the total amount of CO2 we've agreed to transport and store for customers to five million metric tons per year, equivalent to replacing two million cars with EVs, roughly the same number of electric vehicles on the road in the United States today. With the planned Denbury acquisition, potential reduction could be up to 20 times that.
As demonstrated by these new developments, we're continuing to make significant progress in our plans to lead industry and helping society reduce emissions. A major component of our improved earnings is the structural cost savings that we've achieved, currently at $8.3 billion. We remain on track to reach our target of $9 billion in savings by the end of this year. As we develop plans for future years, we're committed to finding additional savings.
Cash flow from operations totaled $9.4 billion in the quarter or $13 billion excluding the change in working capital. Our year-to-date production of 3.7 million oil equivalent barrels per day is on track with the full year guidance we shared last year as part of our Corporate Plan review. Capex investments totaled $12.5 billion year-to-date, also in line with our full year guidance. And consistent with our capital allocation philosophy, we continue to share our success with shareholders, distributing $8 billion in cash during the quarter, including $4.3 billion in share repurchases and $3.7 billion in dividends.
Before we go to Q&A, I'll leave you with a few key takeaways from the quarter. First, our work to structurally improve earnings power is paying off, demonstrated this quarter as we doubled earnings versus a comparable price environment in the second quarter of 2018. Our reorganizations, aggressive investments in advantaged projects, and significant reductions in cost are driving value and improving our competitive position. We've made great progress and have a clear line of sight to much more. In the back half of this year alone, we expect to bring on two advantaged projects, Baytown Performance Chemicals and the Payara FPSO in Guyana, further growing our capacity to generate industry-leading earnings.
The Company's ongoing business transformation is giving the organization a better view of end-to-end value creation and focusing us on the highest value opportunities. Today, we are better positioned than ever to realize the value of our scale and the synergies from improving the integration of our businesses. For the first time in our history, we have a corporate technology, projects, trading, supply chain, and business solutions organization, allowing us to apply the best solutions and talent to our biggest opportunities. And importantly, we are developing the most talented people in the industry, providing unrivaled opportunities to meet some of society's greatest challenges.
The work is delivering exceptional results, driving industry-leading returns on investments and growth in earnings and cash flow. This, in turn, allows us to distribute cash to shareholders through share repurchases and a sustained, competitive, and growing dividend while maintaining investments in industry advantaged projects, including investments in our Low Carbon Solutions business. By leveraging the advantages developed in our traditional businesses, we are laying the foundation for a world-scale, competitively-advantaged, low-carbon business with industry-leading returns. Planned acquisition of Denbury is a step in that direction, improving our decarbonization proposition for customers, while generating attractive returns.
In summary, we're pleased with the quarter, the progress it represents and the improved earnings power of the Company. We're confident that we have the right strategy with the right leadership and best people to effectively execute it, delivering sustained growth and shareholder value.
With that, let me turn it back to Jennifer.
