Key topics: #BigOil #IOCs

An evergreen chronology of Energy Flux articles about international oil companies and how they are adapting to the energy transition

Jan 1, 2021

Big Oil’s painful offshore wind pivot

European oil majors are jostling to become offshore wind heavyweights. Building capital-intensive projects at scale in familiar offshore environments, underpinned by guaranteed returns, has proved alluring. But cost inflation and aggressive bidding at cut-throat ‘subsidy-free’ auctions have eviscerated margins…

a year ago · Seb Kennedy

Big Oil’s chemical high

Fate loves irony. Having been crushed by the 2020 Covid-induced oil crash, integrated US and European supermajors are reporting giddying post-lockdown earnings. Profits in the second quarter were propelled in part by handsome margins for petrochemicals, which are used…

2 years ago · 2 likes · Seb Kennedy

Woodside’s high-stakes BHP merger

Australia’s Woodside Energy is shouldering billions of dollars of oil and gas decommissioning liabilities to clear the way for its flagship Scarborough LNG project. But the proposed merger with BHP is far from a done deal. If it goes through, the combined company would face complex commercial and strategic challenges which could leave it poorly aligned …

2 years ago · 2 likes · Seb Kennedy

‘Constraining oil supply is key to cutting demand’

Oil prices might be riding high on robust post-Covid demand, but don’t expect supply-side pressures to relent. Follow This, the Dutch pressure group whose climate resolutions are winning over investors, is redoubling its campaign to force international oil companies to slash Scope 3 emissions this decade. Outspoken founder Mark van Baal believes this wo…

2 years ago · 2 likes · Seb Kennedy

Shell’s short-term thinking

Viewed through the short-term lens of capital markets, Big Oil has won the argument. Demand is soaring, ESG pressures have constrained upstream investment and a supply shortfall might push Brent into triple digits. IOCs that pursue a leisurely transition into diversified energy companies will reap near-term rewards, but expose themselves to ever greater…

2 years ago · Seb Kennedy

‘We didn’t pay a premium’ – BP

BP CEO Bernard Looney has rejected accusations that the company paid a hefty premium to secure coveted offshore wind licences in the Irish Sea. The sites are located in a privileged region that will reduce installation and maintenance costs, he said. But other bidders paid a lot less for nearby acreage…

2 years ago · Seb Kennedy

Equinor clings to ‘emissions intensity’ targets

For how long can publicly traded oil companies resist calls to reduce their absolute emissions? Norway’s semi-state owned oil company Equinor continues to focus on its emissions intensity – a flexible measure that allows oil production and absolute emissions to rise, even as it aims for ‘net zero’ by 2050. This approach defers painful absolute reduction…

2 years ago · Seb Kennedy

Chevron takes a punt on solar-plus-storage tech

Baseload dispatchable renewable power is the Holy Grail of the energy transition. An Australian technology company promising to deliver it has lured big-hitters such as US oil supermajor Chevron and oilfield services giant Schlumberger into its latest funding round. The addition of other strategic partners also bodes well for commercialisation and rollo…

2 years ago · Seb Kennedy

Judgment day for Big Oil

Yesterday a transatlantic earthquake struck Big Oil. First, a Dutch court ordered Shell to cut its emissions by 45% this decade, in a landmark ruling that also found the Anglo-Dutch oil major liable for Scope 3 emissions from customers and suppliers. This has big implications for other big emitters…

2 years ago · 1 like · Seb Kennedy

Investors punish Big Oil for cutting dividends

Try as they might to reinvent themselves, the oil majors are still viewed by investors as dividend cash cows. European players that cut shareholder payouts are now blighted by discounted stock valuations despite the recent crude rally. To reinvigorate share prices, oil bosses can either boost dividends or sell off parts of their businesses that are pois…

2 years ago · Seb Kennedy

Total leans on its global LNG portfolio to mitigate Mozambique delays

French oil major Total this week demonstrated the strategic benefits of having a diverse global LNG portfolio. Days after delaying the Mozambique LNG megaproject, Total pivoted to Papua New Guinea to fast-track a rival scheme that could partially plug the supply-side gap from the Mozambique delay. With coal-to-gas switching in the power sector driving A…

2 years ago · 1 like · Seb Kennedy

Eni mulls green spin-off to relieve shareholders of low carbon burden

Nobody buys shares in oil companies in order to finance renewables. Oil investors want high-yielding investments that support above-market dividends, not low-risk, low-reward wind farms and solar arrays. This is partly why the oil majors allocate paltry sums to low carbon ventures, despite the evident need for them to diversify and decarbonise. How to r…

2 years ago · 2 likes · Seb Kennedy

Leap of faith: Exxon bets the house on explosive growth in CCS and hydrogen

ExxonMobil’s latest strategy to shore up its finances while investing in lower carbon technologies is asking investors to take several giant leaps of faith in the potential future market for carbon capture and hydrogen. It does not acknowledge the risk that these technologies might fail to commercialise, nor does it say whether the company learned anyth…

2 years ago · 2 likes · Seb Kennedy

You’re hired! Exxon promises US jobs bonanza in return for CCS subsidies

Welcome to your daily dose of global energy transition news, views and analysis. In today’s issue: Exxon promises US jobs bonanza in return for CCS subsidies ‘Green’ bitcoin mining venture needs, er, natural gas UK says deeper emissions cuts won’t affect personal lifestyles…

2 years ago · 1 like · Seb Kennedy

Beyond Exxon: Why a desperate mega-merger with BP might finally make sense

Spare a thought for ExxonMobil shareholders. While the S&P 500 has rebounded from April’s Covid crash to hit a series of all-time highs this autumn, XOM stock is still down 40% year-to-date despite the recent vaccine-inspired market euphoria that has lifted Brent crude back above USD 50 per barrel…

2 years ago · 6 likes · Seb Kennedy

Diversify, consolidate or die: Energy transition poses stark choices to mid-sized oil companies

US oil supermajor Chevron’s headline-grabbing USD 13 billion deal to acquire independent outfit Noble Energy was hailed in some quarters as proof that Big Oil is far from dead and buried, no matter what the fossil fuel divest movement might say. Battered and bruised, the supermajors still have a lot of life left in them. Armed with enviable credit rating…

3 years ago · 3 likes · Seb Kennedy

Lost in transition: Big Oil searches for purpose as peak demand looms

The oil industry is about to enter its final phase: managed decline. Even if there is a strong post-pandemic economic recovery that boosts oil prices at some in the 2020s, it will be Big Oil’s ‘last hurrah’ before global demand peaks definitively and gradually tapers off. Some say this might have happened…

3 years ago · 8 likes · Seb Kennedy

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