Exxon Mobil Corp said on Wednesday its president, Darren Woods, will become chief executive and chairman in January following the retirement of Rex Tillerson, who is U.S. President-elect Donald Trump's choice for secretary of state.
Tillerson, 64, will retire at the end of the year and Woods, 51, will take over effective Jan. 1, Exxon, the world's largest publicly traded oil company, said.
Woods, who was named president and elected to the board in January 2015, was widely expected to become the top executive after Tillerson's retirement next year, when he turns 65, the mandatory retirement age for the company.
Tillerson's nomination as secretary of state speeds up his retirement timeline due to "the significant requirements associated with the confirmation process," Exxon said in a statement.
Woods joined Exxon in 1992 and has held various senior positions at the company. Unlike Tillerson, who rose through the ranks in exploration and production, Woods' background is in the company's chemicals and refining businesses. He was elected as president of Exxon Mobil Refining & Supply in 2012.
The appointment of a 24-year veteran to run the company is not likely to shake up Exxon's strategy which has always emphasized long-term planning. The appointment also provides continuity at a time when oil companies are emerging from a two-and-a-half year rout in oil prices that saw profits and capital spending slashed.
"Broadly speaking, Exxon’s strategy is pretty well locked in," said Pavel Molchanov, an energy analyst with Raymond James & Associates in Houston. "It would have been locked in no matter who was CEO."
Some of the biggest challenges Woods will face is coping with low crude prices, and geopolitics, including U.S. sanctions against Russia, where Exxon has a joint venture with state oil firm Rosneft, said Fadel Gheit, Managing Director and Senior Energy Strategist with Oppenheimer & Co. Inc.
"Just because Darren Woods came from refining and chemicals doesn’t mean that he’s not familiar with the rest of the company's business," said Gheit.
Trump formally named Tillerson on Tuesday as his nominee to serve as secretary of state. He could face a rocky confirmation process, given concerns among both Democrats and Republicans about his ties to Russia.
With Tillerson's retirement, Exxon's board will have 12 directors.
Tillerson earned about $24.3 million in 2016. He has a net worth of $150 million, plus a $70 million pension plan.
Exxon's shares were down about 1.7 percent at $91, in line with the broader energy sector, which fell due to lower crude oil prices.