Exxon Mobil Is Reportedly Investing in Vietnam — Should You?
On Monday, a Vietnamese newspaper — Thanh Nien – reported that the world’s largest energy company, Exxon Mobil (NYSE:XOM), plans on investing $20 billion in a gas-fired power complex along with Vietnam’s state-owned oil and gas company, PetroVietnam. The two companies will build two power plants with a capacity to generate 6,000-6,500 megawatts of power.
While the news has not yet been confirmed by Exxon Mobil itself, we learned the same day that the company sold $5.5 billion in senior notes, which is a big deal considering that the company only has $22.7 billion in debt outstanding. Intuitively speaking it would seem that Exxon Mobil will be using the proceeds from this debt offering in order to partially fund this endeavor in Vietnam.
Presuming this is true, I think investors can take away a lot from this investment. Exxon Mobil is usually very conservative with its investments, which suggests to me that the company sees a lot of opportunity not just in this particular project but in gas and in Vietnam more generally.
We already know the extent to which Exxon is interested in expanding into gas, as was evidenced by the company’s $41 billion purchase of XTO Energy in 2009. The company also has a recent history of investing in Vietnam given its offshore exploration — referenced in the above Thanh Nien article — off the coast of Da Nang.