And we have got more to do there. My expectation is that you will see improved trading results embedded in our businesses because frankly those — that trading organization’s objective is to enhance the value of the businesses. We don’t want a trading organization that’s competing against the base business. We want a trading organization that’s working with the base business to optimize value for the corporation. And they’re doing that and those earnings accrue to the businesses that they’re trading on behalf of. But I’m very pleased with what we saw in 2023. Obviously, the market and volatility is going to have a function — will function heavily or play a heavy function year in year in terms of what we actually deliver. But structurally, we’ve got a really sound base that we’re growing and I think we’re going to continue to see improvement in that space.
Kathy, anything to add?
Kathy Mikells: Yeah, the only other thing that I’d add to that is if you looked at our trading results on a year-on-year basis, in upstream we were lapping kind of a big mark-to-market gain in 2022, right? So that impacted our results. And I’ve mentioned time and time again that quarterly results, especially as a result of that movement in mark-to-market, will kind of ebb and flow. And sometimes we get price timing nuances in the quarter. As we came to the end of this year, those price timing nuances that we saw in the third quarter had fully unwound by the fourth quarter. So I think we start the year overall in a pretty good place.
Paul Cheng: Kathy, is there a number you can share in terms of what’s the contribution for trading for the year?
Kathy Mikells: No, we don’t disclose that. And I think actually all our peers have a pretty high sensitivity to just — competitive sensitivity in terms of disclosing that number. But I think Darren put overall things into a good context, which is last year was record earnings for the company and it was record trading earnings. And so we had a strong result this year in trading, but it was down a bit on a year-over-year basis. And then I mentioned specifically in upstream that we were lapping favorability in terms of mark-to-market favorable gain in 2022.
Paul Cheng: Okay. Thank you.
Operator: The next question is from Neal Dingmann of Truist.
Neal Dingmann: Hi. Good morning, Darren and team. My question is on the Permian, specifically your continued record production to play. It appears, at least from what I’m seeing going forward, your [pro forma] (ph) Permian activity is likely to continue trending higher. And I’m just wondering, maybe, Darren, how you’d respond to maybe any critics who suggest all US companies should instead maintain flat production in order to, I guess, appease Saudi and the others maybe more so.
Darren Woods: Yeah, well, thanks for the question. No, I would just tell you there’s — we’re not going to run the business to appease an external member out there. I think the way we look at it is, can we find — it comes back to every dollar that we choose to invest and spend. Do we see a return? Are we convinced that we’re effectively spending that money and we’re spending it efficiently? That’s the criteria that we’re using. That’s the plans that we’ve built. We expect to grow our volumes in 2024 to about 650 Kbd. And then we’re going to continue that growth through to the targets that we’ve laid out in 2027 of about a million barrels a day — close to a million barrels a day. So that’s the plan that we have. We’re executing to that plan.
And as we’ve said before, year-on-year, it’s not straight ratable growth. It’ll be lumpy growth. But over time, it’ll average about 13%. And we haven’t seen anything to date that would say that’s going to change. Obviously as we bring Pioneer into the fold, we’ll bring their production in and look to kind of optimize across that portfolio that both companies have. And as we’ve said before, that once we close on that, we’ll come back out and have a spotlight where we share what the implications of bringing these two companies together and the impact on our Permian production.
Neal Dingmann: Yeah, makes a ton of sense. Thank you.
Darren Woods: You bet.
Operator: The next question is from Lucas Herrmann of BNP Paribas.
Lucas Herrmann: Yeah, thanks very much. And [glad to have the opportunity] (ph) to talk with you. Following on from the Permian question, actually, Darren, when you were asked about the pace of growth in 2024 in the Permian, I think the time of the capital budget release, one of the comments you made was a desire to build drilled uncompleted wells. I just wondered whether you could talk a little bit around the concept of building inventory, why the need, why put more wells into inventory? Is it very simply adding flexibility to the business in order to maintain the production profile going forward? So what’s the thinking? Thank you.
Darren Woods: Sure. Yeah, I’m happy to do that. And you remember correctly, we did say we were going to build some more DUCs. And I would think about that. And you used the right word, inventory, like any inventory that we have in the business, which is, if you’re optimizing what is a pretty complex system of drilling and fracking and managing simultaneous ops and how you schedule all that and how it interfaces with each other and the planning piece of it, you want to have a little bit of inventory that allows you to continue at a pace and manage around some of the complexities and potential conflicts that you have in developing the acreage. And you’ll recall that what we are doing in the Permian, in the Delaware in particular, is this manufacturing approach where we’re laying out these spines and then executing like a manufacturing organization down that.
So it is a very paced and continuum of work and production. So there are constraints that you hit as you’re doing that consistently across all that acreage and having some DUCs available to us allows us to when we run into an issue with what we’re doing in the immediate vicinity, we have some other opportunities to continue the production. So we use it like any other inventory. Now, obviously the trick is to get that inventory level right. You don’t want a bunch of capital sitting there that isn’t earning its return. This, we think we’ve got to an optimized level that allows us to keep a very efficient, I’d say, manufacturing process running versus a focus on production and production process.
Lucas Herrmann: Thank you. That’s helpful.
Darren Woods: You bet.
Operator: We have time for one more question. Our final question will be from Jeoffrey Lambujon from Tudor, Pickering and Company.
Jeoffrey Lambujon: Good morning, everyone. Appreciate the time. Going back to carbon capture, I was interested in the comment early on about the pilot plan and the potential to lower the costs of direct air capture. Now, imagine there are limitations on what you can share just given, as you mentioned, the proprietary nature of the tech here. But with other key players in the energy space, particularly on the service side, exploring new technologies for this, just thought it would be great to get any commentary you can speak to on key learning so far from this pilot plan and the magnitude of potential savings. Where you see the most opportunity to improve the cost structure and what kind of capital investment that I guess the low carbon solutions business overall might involve over the near term?
Darren Woods: Yeah, sure. I think, and you rightly so pointed out the proprietary nature, so I will limit some of the details of what we’re talking about there, but maybe just from a broader contact standpoint, we’re convinced that carbon capture is going to play a really important role in helping society meet its ambitions to get to net zero or to make certainly significant reductions in carbon emissions. I think it makes a lot of sense to, rather than tear up and throw away the existing infrastructure and the industries that we have in place that are intensive energy users, that we find a way to deal with the problem, which is the emissions. So I think carbon capture plays a role there. The technology that we have today, frankly, wasn’t developed for this application.
