* Expects capex spending up 12 pct to $29 billion in 2009
* Nine new projects in 2009 to add 485,000 BOE per day
* $1 bln in refinery spending for low-sulfur diesel
* Shares down 3.8 percent (Recasts; adds CEO comments, byline)
By Matt Daily
NEW YORK, March 5 (Reuters) - Exxon Mobil Corp (XOM.N) plans to hike its spending by nearly 12 percent even as most oil and gas producers rein in spending amid the steep drop in oil and natural gas prices.
"Around the house it feels pretty much business as usual," Chief Executive Officer Rex Tillerson told reporters after an analysts' meeting.
Exxon, the world's largest publicly traded company, said it would spend about $29 billion in 2009, the upper end of its five-year annual spending target of $25 billion to $30 billion per year, as part of its effort to meet long-term growth in world demand.
"Exxon Mobil's business is strong, and so is our commitment to investing through the business cycle," Tillerson said.
The company's spending for 2009 could rise even higher, Tillerson said, if it sees new opportunities.
"We are well-positioned to fund and progress those opportunities," he said.
Among those could be new partnerships with national oil companies, although that would not preclude deals with non-state run companies that have growth potential, he said.
Exxon has $32 billion on its balance sheet, even as many energy companies have tightened their belts to conserve cash in a weak economy that has knocked oil prices down 70 percent from the highs above $147 a barrel in July.
Exxon set a company and U.S. record for annual profits in 2008 at $45.2 billion as oil prices skyrocketed to their record highs, and said its spending would help bring on line nine projects in 2009 that will ultimately add 485,000 barrels of oil equivalent (BOE) production per day.
Still, Tillerson said there was about four to five million barrels a day of excess global oil production capacity in the current environment, and that demand would likely be flat to perhaps only slightly higher this year. Demand for gasoline in the United States, the world's largest oil consumer, would be near flat after last year's decline, he said.
Exxon's capital spending was about $26 billion in 2008, up about 28 percent from 2007. The company also spent $32 billion in share buybacks last year.
Most of its exploration and spending would go toward projects expected to come on line after 2010, and production for 2008 is likely to be about 4 million BOE per day, near the 4.11 million BOE the company produced last year.
The company will also spend about $1 billion on refinery projects in the United States and Europe that would add about 140,000 barrels per day in capacity for lower sulfur diesel fuel.
Exxon shares fell 3.8 percent to $63.18 on the New York Stock Exchange early Thursday afternoon.
As of Wednesday's close, the stock had slumped nearly 18 percent so far this year, but was the second-best performer behind McDonald's Corp (MCD.N) in the Dow Jones industrial average .DJI over the past six months, with a 17.5 percent decline in that period.
The stock was also the second-best performer in the Standard & Poor's Energy Index .GSPE over the last six months and easily outperformed the index, which was down 42 percent in that period. (Reporting by Matt Daily; Editing by Lisa Von Ahn, Dave Zimmerman, Richard Chang)