Exxon continues unprecedented fall, writes $ 20 billion

When the fossil fuel industry winds at last down in the next decades, 2020 will be a pivotal year. Large companies have been knocked off their pedestals, and there is no greater fall than that of Exxon.

Late Monday, the business ad he noted the value of the oil and gas fields he had previously planned to develop in as much as $ 20 billion. It is the biggest tel to write in the history of Exxon and revealing the immense pressure the pandemic and the resulting economic downturn weighed on the company and the oil industry as a whole.

In the announcement, the company also said it would spend less on exploration, which makes sense given the huge drop in demand for oil. He previously planned to cut exploration and other capital expenditures by $ 30 billion each year through 2025. Now he plans to spend $ 16 billion to $ 19 billion in 2021 and $ 20 to $ 25 billion. dollars thereafter until 2025. Now, I’m not an oil analyst, but planning for an increase in spending beyond 2021 seems quite optimistic given that we may have just passed peak oil demand and, with a Joe Presidency Biden, the prospect of a more robust climate policy (or any climate policy, really) in the United States and around the world seems much more likely. It turns out that, I am not alone.

“In this environment, it doesn’t make sense to me. What is the hurry? Mark Stoeckle, Senior Portfolio Manager at Adams Funds, told Reuters, referring to Exxon’s plans to boost investment after next year. “I don’t think it’s going to help them with investors.”

Alone, this news of the history of Exxon to write would be staggering for a company that has virtually defined the American oil industry for decades. But it comes after a series of earthly changes within the company. Even before depreciation, Exxon reported to the Securities and Exchange Commission that up to a fifth of its proven oil reserves – an economic term defined by the SEC – could lose this status due to low oil prices. He has lost billions over the first three quarters of 2020, and the free fall drove its stock to drop. For this reason, Exxon was started from the Dow Jones Industrial Average after a 92 year run. It’s not all about the money either; the company also lost its place because the largest American oil company at Chevron.

This did not prevent Exxon from paying shareholders a hefty dividend, which is about $ 15 billion. But this led the company to continue with dismissals; in October, he announced a plan to cut 14,000 jobs. Exxon continued financial decline and layoffs even if it brings points to shareholders to the danger of an uncontrolled decline for the oil industry.

I feel like a record broken saying this, but the coal industry is a huge warning of what this decline could look like if safety measures are not put in place for workers. Just last week Saint-Louis public radio reported that Peabody Energy eliminates a healthycare benefits program and life insurance for retired miners in what is just the latest sign of how coal companies are bankrupting workers who have made them billions. Biden’s climate plan includes a call to help coal miners and the communities that have developed around mines and power plants to get the benefits they deserve and move into the 21st century. But if the past year has shown us anything, workers in the oil and gas industry are going to need the same kind of help.