ExxonMobil’s 2025 Geothermal Play: From Sidelines to Star
ExxonMobil’s Geothermal Pivot: From Sidelines to Strategic Player in 2025
Industry Adoption: How ExxonMobil is Shaping the Geothermal Market Without Drilling a Single Well
ExxonMobil’s engagement with geothermal energy has undergone a significant strategic evolution, shifting from passive observation to active preparation. Between 2021 and 2024, the company was best described as a cautious, yet strategic, observer. CEO Darren Woods publicly confirmed that ExxonMobil was watching the progression of geothermal technology, waiting for it to mature before considering any direct investment. During this period, the company’s low-carbon strategy and its substantial $17 billion investment fund for 2022-2027 explicitly prioritized Carbon Capture, Utilization, and Storage (CCUS), hydrogen, and biofuels, with no mention of geothermal. This “wait-and-see” approach focused on strengthening core competencies in adjacent fields, such as its $4.9 billion acquisition of CCUS-specialist Denbury and its venture into lithium extraction in Arkansas, both of which leverage subsurface and drilling expertise directly transferable to geothermal.
The inflection point arrived in 2025. ExxonMobil is no longer just watching; it is strategically positioning itself as a critical enabler and future player. The company now formally includes geothermal in its Total Addressable Market (TAM) analysis for a new, larger $30 billion low-carbon solutions fund (2025-2030). This marks a pivotal change in strategic intent. The company’s actions have become more direct, though still indirect in operation. In July 2025, it sold two former natural gas wells in Munster, Germany, to a geothermal heating project developer. This move is a template for a new opportunity: monetizing legacy assets while lowering the high capital expenditure of drilling for geothermal operators. It allows ExxonMobil to facilitate market growth at low risk. This shift from a hands-off observer to a strategic enabler, coupled with the immense market pull from AI data centers needing 24/7 reliable power, signals that ExxonMobil is methodically setting the stage for a more aggressive entry once Enhanced Geothermal Systems (EGS) become fully commercial.
Table: ExxonMobil’s Strategic Investments in Geothermal and Adjacent Sectors
| Partner / Project | Time Frame | Details and Strategic Purpose | Source |
|---|---|---|---|
| Lower-Emission Investments | 2025 – 2030 | ExxonMobil allocated up to $30 billion for lower-emission investments. Critically, geothermal is now included in the company’s Total Addressable Market analysis for this fund, providing a capital pool for future direct investment as the technology matures. | Growing Low Carbon Solutions | ExxonMobil Sustainability |
| Acquisition of Denbury Inc. | July 2023 | The $4.9 billion acquisition of Denbury, a CCUS specialist, strengthened ExxonMobil’s expertise in subsurface reservoir management and CO2 transport—core competencies that are directly transferable to managing EGS reservoirs. | ExxonMobil’s CCUS acquisition, Fervo Energy’s geothermal … |
| Low-Emission Initiatives Investment | 2022 – 2027 | A planned investment of approximately $17 billion focused on CCUS, hydrogen, and biofuels. Geothermal was notably absent from the stated priorities, highlighting the company’s “wait-and-see” stance during this period. | ExxonMobil Increasing CCS, Hydrogen, Biofuels Investments |
Table: ExxonMobil’s Capability-Building Partnerships
| Partner / Project | Time Frame | Details and Strategic Purpose | Source |
|---|---|---|---|
| Collaboration with Tech Firms | February 2025 | ExxonMobil began developing new partnerships to enhance its energy solutions, including the development of advanced geothermal projects. This signals a move to combine its operational scale with external tech to tackle EGS challenges. | How Shell, Chevron & ExxonMobil Balance Big Profits with … |
| Neptune Energy, Rosewood, and EBN | June 2022 | Through its subsidiary, ExxonMobil partnered to advance the L10 CCS project in the Netherlands, aiming to store 4-5 million tonnes of CO₂ annually in depleted offshore gas fields, demonstrating large-scale subsurface reservoir management skills. | Neptune Energy, ExxonMobil, Rosewood and EBN to … |
| PT Pertamina | May 2022 | A joint study agreement with Indonesia’s state energy company to assess lower-emissions technologies like CCS and hydrogen. This placed ExxonMobil in a strategic relationship with a major player in a key geothermal market. | Chevron and Exxonmobil to explore lower carbon … |
| Houston CCS Hub Initiative | September 2021 | ExxonMobil led a group of eleven companies supporting a large-scale CCS hub, reinforcing its project management leadership in complex subsurface infrastructure projects relevant to geothermal. | Carbon capture and storage gains wide industry support in … |
Geography: ExxonMobil’s Subsurface Strategy Goes Global
Between 2021 and 2024, ExxonMobil’s geographic focus for its low-carbon activities was centered on the United States, but these were not geothermal projects. The company advanced its subsurface expertise through a lithium drilling project in Arkansas and the promotion of a massive carbon capture hub in Houston, Texas. These initiatives were crucial for honing the exact operational skills needed for geothermal development within a familiar regulatory environment. The partnership with PT Pertamina also established a strategic foothold in Indonesia, one of the world’s most important geothermal markets, even though the collaboration officially centered on CCS and hydrogen.
In 2025, ExxonMobil’s geographic strategy showed its first direct link to geothermal, signaling a clear international dimension. The sale of two former natural gas wells to a geothermal developer in Munster, Germany, is a landmark event. While not a direct investment, it marks the company’s first tangible action in the European geothermal market. This move demonstrates a repeatable, low-risk model: leveraging its global portfolio of legacy oil and gas assets to support the growth of the geothermal industry. This strategy turns potential liabilities into assets and creates a new, symbiotic relationship with geothermal developers worldwide, starting in Germany. It suggests a future where ExxonMobil could enable geothermal projects across any region where it has a historical operational footprint.
Technology Maturity: From Advancing O&G Tech to Enabling Geothermal Systems
From 2021 to 2024, ExxonMobil’s technology focus was on advancing and applying its mature oil and gas technologies to adjacent low-carbon sectors, while observing the nascent geothermal technology market. A prime example is the 2021 testing of a fully automated land drilling rig with Nabors Industries. This technology has the potential to drastically cut drilling times and costs for geothermal wells, but its initial application was for traditional horizontal oil wells. During this time, the company was building capabilities in Direct Lithium Extraction (DLE) and CCUS, both of which rely on the same subsurface management and fluid processing technologies as geothermal, but it refrained from applying them directly to geothermal power generation. It was a period of capability-building in parallel to, but separate from, the geothermal market.
The period from 2025 to today marks a clear shift toward embracing geothermal-specific technologies, particularly Enhanced Geothermal Systems (EGS). The company has now stated it is “developing advanced geothermal projects” and leveraging its subsurface expertise for EGS applications. The sale of wells in Germany for repurposing validates a simple but commercially effective technological pathway that supports conventional geothermal projects. Furthermore, its continued focus on DLE is highly synergistic, as lithium is often co-located with geothermal brines, suggesting a future where a single drilling operation could yield both clean energy and critical battery materials. While ExxonMobil is not yet piloting EGS at scale like startups Fervo Energy, it has moved from simply possessing transferable technology to actively planning for its application in the geothermal sector.
Table: SWOT Analysis of ExxonMobil’s Geothermal Position
| SWOT Category | 2021 – 2023 | 2024 – 2025 | What Changed / Resolved / Validated |
|---|---|---|---|
| Strengths | Vast subsurface and drilling expertise from oil and gas; pioneered automated drilling rigs; significant capital via a $17B low-carbon fund. | All prior strengths plus a larger, $30B low-carbon fund that explicitly includes geothermal in its TAM; demonstrated a new business model by selling legacy wells in Munster, Germany. | The company validated its ability to monetize legacy assets to support geothermal and formally recognized geothermal as a strategic market, aligning its immense capital and technical skills for future entry. |
| Weaknesses | No direct operational experience in geothermal power; publicly prioritized CCUS and biofuels over renewables; lagged peers like Chevron in geothermal pilot projects. | Still not a direct operator or developer of geothermal power plants; the “enabler” strategy risks being too slow as competitors secure prime assets and offtake agreements. | The weakness remains a lack of direct operational proof points. While the strategy has been defined, execution of a proprietary geothermal project has not yet occurred, leaving a gap between capability and market presence. |
| Opportunities | Potential to acquire successful EGS startups (“acquire-and-scale”); leverage skilled O&G workforce for geothermal expansion as called for by the Biden administration. | Massive, urgent demand for 24/7 clean power from AI data centers; ability to replicate the Munster well-sale model globally; synergies with its DLE lithium business. | The market opportunity crystallized from a general “energy transition” goal to a specific, high-value commercial driver: powering AI. This makes the business case for geothermal concrete and immediate. |
| Threats | Agile startups like Fervo Energy could de-risk and scale EGS faster, securing first-mover advantages; reputational risk from perceived inaction on renewable power generation. | Geothermal startups are now signing commercial deals to power data centers, potentially locking ExxonMobil out of key customer segments; natural gas is a direct competitor for this 24/7 power demand. | The threat evolved from a potential long-term risk to an immediate commercial competition. Competitors are no longer just piloting tech; they are winning commercial contracts in a market ExxonMobil wants to serve. |
Forward-Looking Insights and Summary
ExxonMobil is executing a strategy of calculated patience, but the pace is quickening. The company has moved from the bleachers to the dugout, ready to enter the game. The data from 2025 signals a clear preparatory phase, positioning it to become a dominant player once key technological and economic thresholds are met. The most critical signal to watch for in the year ahead will be the first allocation of capital from its $30 billion low-carbon fund into a specific geothermal technology, pilot project, or acquisition. A partnership with or acquisition of an EGS leader like Fervo Energy would be a definitive sign that the “wait-and-see” era is over.
The explosive energy demand from AI data centers has provided a powerful commercial catalyst that aligns perfectly with geothermal’s 24/7 reliability. This creates a direct competitive dynamic with ExxonMobil’s plans to build natural gas plants for the same purpose. Monitor whether the company’s strategy evolves to a complementary “gas + geothermal” offering. Finally, the sale of legacy wells in Germany is not a one-off event; it is a strategic template. Expect to see similar moves in other regions, allowing ExxonMobil to foster the geothermal ecosystem, generate low-risk revenue, and gather critical market intelligence before deploying its immense capital and project execution capabilities to scale the technology globally.
Frequently Asked Questions
Has ExxonMobil started drilling its own geothermal wells?
No. According to the analysis, as of 2025, ExxonMobil has not drilled a single geothermal well. Its strategy has been to act as a ‘strategic enabler’ by leveraging its existing assets, such as selling two former natural gas wells in Germany to a geothermal developer, to facilitate market growth at a low risk to itself.
What was ExxonMobil’s stance on geothermal before 2025?
Between 2021 and 2024, ExxonMobil’s stance was described as a ‘wait-and-see’ approach. It was a ‘cautious, yet strategic, observer,’ publicly stating it was waiting for the technology to mature. Geothermal was notably absent from its $17 billion low-carbon investment fund for 2022-2027, which prioritized CCUS, hydrogen, and biofuels.
How are ExxonMobil’s investments in carbon capture and lithium related to its geothermal strategy?
These investments are crucial for building transferable skills. The acquisition of CCUS-specialist Denbury and projects like the Houston CCS Hub strengthen ExxonMobil’s expertise in subsurface reservoir management. Similarly, its lithium drilling project in Arkansas hones the exact operational skills needed for geothermal development. These activities allow the company to build core competencies for geothermal without yet investing directly in it.
What changed in 2025 to signal a pivot in ExxonMobil’s strategy?
In 2025, two key events marked a strategic pivot. First, ExxonMobil formally included geothermal in the Total Addressable Market (TAM) analysis for its new, larger $30 billion low-carbon solutions fund. Second, it made its first tangible move in the geothermal market by selling legacy wells in Germany for a geothermal project, establishing a template for monetizing old assets.
Why is the demand from AI data centers important to ExxonMobil’s geothermal plans?
The massive and urgent demand for 24/7 reliable power from AI data centers provides a powerful commercial catalyst for geothermal energy. This ‘market pull’ makes the business case for geothermal concrete and immediate, creating a direct competitive dynamic with ExxonMobil’s traditional natural gas business and validating its increased strategic focus on geothermal.
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