Oil Companies Charge into Lithium

From transcendent performances by singers-turned-actors like Lady Gaga, to that weird time in the 90s when Michael Jordan decided to try minor league baseball, transitions are part of almost every industry, and Big Oil is no different.

Background: On a recent earnings call, ExxonMobil CEO Darren Woods mentioned that the company is actively exploring opportunities in lithium, and he sees lithium mining as an “extension of a lot of the capabilities we already have”.

• The lithium would be extracted from the brine produced from aging oil wells.

Much of the infrastructure required to produce and transport lithium-rich water already exists in the oil and gas industry.

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In addition to Exxon, other prolific oil players like Occidental Petroleum, Chevron, and Pioneer Resources have announced similar interest in exploring the lithium market.

As if on cue: Exxon’s northern sister Imperial Oil is just weeks away from firing up their lithium extraction pilot project in partnership with Alberta-based E3 Lithium.

• The project is expected to produce 20,000 tonnes of battery-ready lithium hydroxide annually.

Zoom out: Although demand for lithium has more than tripled since 2017, it’s not time to cash in your oil stocks just yet. To butcher a line from Hank Hill, oil companies will continue to sell petroleum and petroleum accessories for years to come.

But with lithium now on Big Oil’s radar, it’s clear the industry expects the metal to become as lucrative as putting a professional wrestler-turned-actor into literally any movie.