Exxon Mobil unveils lithium production plans: will this spur XOM stock rise?

In a strategic move towards diversification, Exxon Mobil (NYSE: XOM) has unveiled plans to become a key player in the electric vehicle (EV) supply chain.The company has set its sights on lithium production, with the initiation of the first phase of production operations planned to start in Arkansas.Exxon’s Arkansas lithium well to be operational by 2027Exxon Mobil’s ambitious plan to start lithium production is scheduled to start by 2027, marking a significant shift in the company’s focus.The decision comes on the heels of the purchase of drilling rights in the Smackover formation of southern Arkansas for over $100 million and the company’s exit west Qurna 1 field in southern Iraq.Arkansas is renowned for being one of the most abundant lithium resources in North America. Exxon’s goal is clear: to be a leading producer of lithium and generate enough supply to meet the manufacturing needs of over 1 million electric vehicles annually by 2030.The company plans to build one of the world’s largest lithium processing plants in Arkansas, with a reported capacity to produce 75,000-100,000 metric tons per year. Utilizing direct lithium extraction technology, Exxon aims to separate lithium from saltwater obtained through conventional oil and gas drilling methods.Exit from west Qurna 1 field in southern IraqSimultaneously, Exxon Mobil has exited its role as the operator of the West Qurna 1 field in southern Iraq. PetroChina (SHA:601857) has stepped in to replace Exxon as the lead contractor, taking over the largest stake in the field. This move follows Exxon’s announcement in 2020 of its plans to withdraw from Iraq’s oil industry.Analysts speculate that Exxon’s decision to exit West Qurna 1 may be linked to strained relations with the Iraqi government, possibly stemming from Exxon’s involvement in oil production in the Kurdistan autonomous region, which has conflicting interests with Baghdad.Exxon Mobil (XOM) stock forecastExxon Mobil’s stock (NYSE: XOM) has experienced a 3.96% decline in the last five days, currently trading at $103.75. Despite this dip, the stock has shown some bullish signs, with a 0.41% gain in pre-market trading hours, possibly buoyed by the positive news regarding the Arkansas lithium well.Analysts, based on recent forecasts, have a median target of $123.00 for Exxon Mobil stock, indicating an 18.51% potential increase from the current price. Additionally, the average price target from 19 Wall Street analysts stands at $129.74, suggesting a 25.05% change from the current price.Exxon Mobil stock price forecastAs Exxon ventures into lithium production and navigates changes in its oil operations, its stock’s future movements remain uncertain. Investors are closely watching developments in both the lithium sector and geopolitical factors influencing Exxon’s global operations.The post Exxon Mobil unveils lithium production plans: will this spur XOM stock rise? appeared first on Invezz