Big Oil enters EV arena

Exxon's expansion into the sector comes as emerging technologies aim to boost the global production of the ultralight metal by filtering it from salty brine deposits found across the globe and supplying it to battery makers eager for fresh sources.

Exxon, which invented the lithium-ion battery in the 1970s but stepped away from the technology, plans to begin producing at least 10 000 metric tons a year of lithium in Arkansas by 2026 with partner Tetra Technologies in what has been labelled "Project Evergreen", according to the source.

That initial production would be roughly equivalent to the amount needed to produce 100 000 EV batteries.

Reuters reported this year that Exxon had agreed to develop more than 6 100 lithium-rich acres in Arkansas with Tetra, which produces chemicals for water treatment and recycling.

Exxon has been drilling wells in Arkansas this year to study the vast Smackover Formation, a geological formation stretching from Florida to Texas that teems with lithium- and bromine-rich brine. The company has also been testing unproven direct lithium extraction (DLE) technology that will be crucial for commercial operations, according to the source, who was not authorised to speak publicly.

An Exxon spokesperson declined to comment. A representative for Tetra was not immediately available to comment.

For Exxon and other oil companies, lithium production offers the prospect of selling a new product with relatively little added cost. Darren Woods, Exxon CEO since 2017, recently told investors during a call that the lithium sector was "fairly promising".

He also said: "We see an opportunity to really leverage the things that we are pretty good at."

Exxon, like other fossil fuel producers, has faced pressure to reduce carbon emissions from operations. Reuters reported this year that Exxon shareholder, Engine No 1, had pressured the company to deploy DLE.

Exxon is not expected to publicly announce which DLE technology it has chosen, according to the source. The company has a long-standing pattern of not disclosing some vendors.

Reuters reported this year that Exxon and Chevron held talks with International Battery Metals and EnergySource Minerals about licensing DLE Technology.