Exxon, the world's second-largest company, plans to start 12 new gas and crude projects in the next two years, Mark Albers, a senior vice president at the Irving, Texas-based company, told analysts Thursday in New York. Capital spending on wells, floating platforms, gas-export plants and refineries will rise 3.4 percent this year to US$28 billion.

Chief Executive Officer Rex Tillerson is counting on a US$28.8 billion acquisition of Fort Worth, Texas-based gas producer XTO Energy Inc. as well as new gas developments from the South Pacific to the Celtic Sea to counter a 6.7 percent drop in output in the past five years.

“Gas represents an opportunity to scoop up potential reserves,” said Gianna Bern, president of Brookshire Advisory & Research Inc. in Flossmoor, Illinois.

Tillerson expects gas demand to surpass that of coal in the next two decades as more rigorous environmental restrictions prompt electricity producers to build gas- rather than coal- fired generators.

Gas futures traded in New York have lost almost one-fifth of their value this year as surging output from new wells in Texas and Louisiana added to a supply glut. Only sugar has performed worse than gas among commodity futures since the end of 2009.

Exxon expects to increase production by 3 percent to 4 percent this year, Andy Swiger, a senior vice president, said during Thursday's presentation. That would be at least 10 times the rate of growth in 2009.

Gas accounted for all of Exxon's production growth last year as the company added 373 gas-producing wells, a 4 percent increase from 2008, a company filing with the U.S. Securities and Exchange Commission showed. The number of Exxon-operated oil wells around the world declined by two in 2009.

The company has 69 trillion cubic feet of gas reserves, Tillerson said in the presentation Thursday. That's more than all the gas reserves in Canada.

Buck