A Wall Street Journal exclusive reports over the weekend that the oil and gas company, Exxon Mobil (NYSE:XOM) recently purchased drilling rights to a sizable chunk of Arkansas land from which it aims to produce lithium, a key ingredient in batteries for electric cars, cell phones and laptops.
Exxon has reportedly acquired 120,000 gross acres in the Smackover formation of southern Arkansas from Galvanic Energy, an exploration company, as per sources familiar with the matter. The objective behind this purchase is for Exxon to establish a presence in a region speculated to hold substantial lithium deposits. Their aim is to utilize these resources for mineral production while also assessing the feasibility of extraction technologies. Exxon could begin drilling on the prospect in the coming months, people familiar with the matter said, and could expand its operations if it proves profitable.
Though Exxon has never publicly proposed producing lithium as part of its investment plans, lithium production would diversify Exxon’s portfolio and expose it to a rapidly growing market, positioning the company to accommodate electric vehicles.
Exxon has plans to spend $17 billion through 2027 on cutting carbon emissions and developing low carbon technologies. The company has said it would limit its clean-energy investments in technologies that hew to its core oil-and-gas business, such as hydrogen and carbon capture.
Shares of XOM are down 0.09% in mid-day trading on Monday.