Exxon secret documents show company can never recover

A worker operates sluices in the Nihran Bin Omar field in northern Basra, Iraq.

A A worker operates valves in the Nihran Bin Omar field in northern Basra, Iraq.
Photo: Nabil al-Jurani (AP)

The economic fallout from the covid-19 pandemic has hit the oil industry hard, and Exxon in particular is feeling it. Internal documents show that the company does not expect a big turnaround anytime soon despite the establishment of a good face for shareholders.

Exxon is waiting oil prices will fall for most of the next decade. The company lowered its forecast for future oil prices for each of the next seven years from 11% to 17%, the Wall Street Journal reported Wednesday, citing a report made at the September financial planning meetings.

The documents show last year, the company predicted that Brent oil prices – which the world uses as a benchmark for the price of oil – would be an average of $ 62 per barrel for the next five years, then drop to $ 72 in 2026 and 2027. But now analysts at the company estimate that the price of a barrel will not exceed $ 55 on average until 2025, and that in the next two years, it will only go up to $ 60. An analyst told the Wall Street Journal that “Exxon’s breakeven point is the worst among its peers, and at current spending levels its oil and gas production is on the verge of declining.”

The new outlook comes in the midst of a terribly terrible year for the fossil fuel giant, which has lost more than $ 1 billion since the start of the pandemic. Last month, Chevron has overtaken Exxon as the largest energy company in the United States, and soon after, Exxon analysts said he faced financial losses for the third consecutive quarter.

Even when it comes to the energy giants, Exxon is truly despicable. Troves evidence show that for decades he knew his products caused dangerous global warming even as he waged a disinformation campaign to keep the confused audience. The company also faced a number of lawsuits for deceptive shareholders and climate damage as good as has not yet been held responsible in these cases.

Yet Exxon’s new predictions are not exactly good news, because as much as I would love to dance on the grave of the bankrupt oil company, it is not the meanest people in the company who suffer the most. In the typical way of companies, workers to have seen the worst impacts of the recession as the company lays off a large part of its workforce, while Exxon shareholders have been paid big sums.

The crash is also expected to leave the company with stranded assets, or oil and gas reserves. which end up being worth less than expected when purchased and developed. This is all the more true as Exxon plans to continue to sink further into economic ruin by producing more and more oil. In fact, last month another leaked document showed that Exxon plans to produce an additional 1 million barrels of oil per day over the next seven years, thereby increasing its carbon pollution by 17% by 2025. Some oil wells fall into disrepair full, and rather than spending the necessary funds to wind them down safely, some companies have just left them spit out a greenhouse that warms the planet gases. This means that when the company abandons its projects, the public suffers the damage. and pay the cleaning fee.

Now it looks like things could get worse for Exxon. The company plans to cut spending, but even if it makes dramatic cuts, analysts expect it will need oil prices above $ 55 a barrel next year to cover its capital expenses and its dividends. Without these prices, he’ll likely downsize even more – in fact, it’s said he could lay off 15% of his staff, in total.some 14,000 jobs lost.

Exxon’s latest woes are the most recent sign that the shift away from fossil fuels is already underway and that renewables are the future. While the oil market is in shambles due to declining demand for fuel, some forms of renewable energy are prosperous. But how this transition occurs has huge implications for workers and the planet.

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