By Armando Duke

(AXcess News) Houston, TX - Exxon Mobil Corp. (NYSE: XOM) said it plans on boosting oil output a million barrels a day as the world's No. 1 oil company begins a three-year strategy to take on 20 new projects thanks to the windfall profits earned in 2006.

Exxon Mobil chief executive Rex Tillerson said the company plans on spending $20 billion per year to boost production by 1 million barrels per day.  Tillerson's sitting on close to $40 billion in cash from earnings last year alone and Exxon is going to spend the money to boost its production rate.

The Irving, Texas-based oil giant says its project inventory at the end of 2006 has the potential to develop 24 billion oil-equivalent barrels.  A far cry from the 4.2 billion oil-equivalent barrels Exxon actually produced last year.

Exxon's projects include liquefied natural gas projects in Qatar, deepwater fields in Angola and the Gulf of Mexico, and oil fields in the North Sea.  Tillerson outlined those plans to analysts in New York Wednesday.

While critics argue that 'big oil' companies have been given too many breaks by the Bush administration, Exxon's�capital expenses have actually rose 30 percent since 2002.  True, Exxon enjoyed record profits but Tillerson defended the oil giant saying all that cash is going to be reinvested into new projects that will significantly increase global rates of production which the U.S. and other economies need badly.

While inflation has been costly at Exxon, Tillerson said the money is being spend on new investments, not existing costs.

Exxon management attributed last year's strong results to tight budget controls, not price gouging as many critics argue.  According to Cambridge Energy Research, costs for engineering, steel and construction have risen on average 50 percent for the oil and gas industry since 2004, which lends credit to Exxon's ability to control costs in that inflationary environment.

Exxon's internal spending on new project development last year was 12 percent more than 2005, or $19.9 billion, and the Company expects to continue at that pace ($20 billion) between 2008 to 2012.  "We will continue to be the industry leader," Tillerson said.

Despite Tillerson's enthusiasm, the market didn't exactly swell with awe this morning after Exxon said it's targeted annual rate of production growth (3%) may not be maintainable, citing delays in projects where Exxon is not the controlling operator - such as Enersis S A (NYSE: ENI) and the Thunder Horse drilling platform of BP Plc (NYSE: BP) - in which Exxon is a minority partner.

Shares of Exxon Mobil were up 4 cents at $71.68 this morning in New York.