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Bloomberg: Big Oil Goes Looking for a Career Change
Posted on 9/16/20 at 2:19 pm
Posted on 9/16/20 at 2:19 pm
quote:
Bloomberg) -- For most of the past century, Big Oil executives found it pretty easy to explain to investors how their businesses worked. Just locate more of the commodities that everyone needed, extract and process them as cheaply as possible, and watch the profits flow.
That’s all over now. The change has been so profound that the chief executive officer of BP Plc recently found himself hyping the profit potential of another commodity. “People may not know—BP sells coffee. We sold 150 million cups of coffee last year,” Bernard Looney said in an interview in August, referring to beverage kiosks attached to the company’s fuel stations. “This is a very strong business. It’s a growth business.”
Perhaps it was tongue-in-cheek, or a way for the leader of the world’s fifth-largest international oil company to emphasize a relationship with consumers. But it’s clear Looney and other oil bosses are struggling to sell their plans for a future in which the world wants more green energy. Last year, for the first time in history, solar and wind made up most of the world’s new power sources, according to BloombergNEF. If the margins on cappuccinos look good right now, that’s an indication of how hard it will be for Big Oil to rapidly ditch its winning formula of drilling, pumping, and refining while spending its way into renewables.
quote:
What is the future of Big Oil without oil? At the extreme of this approach are the pathways sketched out by BP and Italian oil group Eni SpA. These companies claim that in the next decade they will come to resemble a cross between a slimmer version of a traditional oil company and what’s today more like a utility (with, yes, a coffee-selling convenience store chain for drivers of electric vehicles). As the legacy business fades, the theory goes, investments in renewable electricity, biofuels, and EV charging points will pay off.
If in the past the biggest names of the industry were known as “international oil companies,” the new jargon describes this approach as creating “integrated energy companies.” Michele Della Vigna, the top oil industry analyst at Goldman Sachs Group Inc., expects to see oil giants attempt the same all-in strategy as before. “We believe the coming decade will see them integrating vertically in gas, already evident, and in power,” he says.
quote:
"All the companies are swimming in the same water of energy transition,” says Yergin, “but they are adopting different strokes to get to the other side.”
The answer from BP is far more radical than from Chevron. But even the smaller steps by American supermajors are remarkable by the standards of a conservative and slow-moving industry. Chevron’s last update to its shareholders in July highlighted an oil project, a deal to buy fuel stations, and investment in solar power. It looks like the end of an era.
quote:
The difference this time around is that most top oil executives are adamant there’s no going back. “Our transformation is irreversible,” says Claudio Descalzi, CEO of Eni, the sort of comment that’s widely echoed by his peers. Most senior executives simply don’t believe hydrocarbon prices will ever come back to the above-$100-a-barrel days for any sustained period. And the social, and investor, pressure to tackle climate change is unlikely to abate.
LINK
And there is still a weekly thread on the Money Board whether XOM is a buy at <$40. Talk about having one's head in the sand...
This post was edited on 9/16/20 at 2:21 pm
Posted on 9/16/20 at 2:19 pm to rickgrimes
quote:
“People may not know—BP sells coffee.
They probably contaminated that too.
Posted on 9/16/20 at 2:20 pm to rickgrimes
Oil isnt going anywhere. We dont just use oil for fuel.
Posted on 9/16/20 at 2:21 pm to rickgrimes
quote:
And there is still a weekly thread on the Money Board whether XOM is a buy at <$40.
I've been buying a little bit at a time for a while. If people are using petroleum products, XOM will be a leader in that industry.
Posted on 9/16/20 at 2:24 pm to rickgrimes
Oil and Natural Gas are not cheap because we do not use it. They are cheap because we can so easily extract it now.
It is crazy that people are pushing more expensive forms of energy when more traditional forms of energy are becoming cheaper.
It is crazy that people are pushing more expensive forms of energy when more traditional forms of energy are becoming cheaper.
Posted on 9/16/20 at 2:25 pm to rickgrimes
quote:
Our transformation is irreversible
Typically that's what happens when developed governments are going to be spending trillions to fund alternative energy. Hilariously enough if we have another population boom oil companies will become the darlings again.
This post was edited on 9/16/20 at 2:26 pm
Posted on 9/16/20 at 2:26 pm to rickgrimes
O&G is going to get hammered over the next 10 years as more and more electric vehicles come online
Posted on 9/16/20 at 2:27 pm to rickgrimes
I mean, you know it's time to get out of big oil when Saudi Arabia is selling Saudi Aramco and getting out of the oil business.
Posted on 9/16/20 at 2:27 pm to rickgrimes
When oil is up, it's never going down again. When oil is down, it's never going up again.
Look outside, electric cars, charged by fossil fuel fired generators. Any battery powered air planes or cargo ships?
Look outside, electric cars, charged by fossil fuel fired generators. Any battery powered air planes or cargo ships?
Posted on 9/16/20 at 2:33 pm to rickgrimes
That WTI hit 39.00 today
Don't Call It A Comeback
Don't Call It A Comeback
Posted on 9/16/20 at 2:48 pm to rickgrimes
quote:
That’s all over now. The change has been so profound that the chief executive officer of BP Plc traded in his F250 and custom bumper nuts for a prius and a pussy hat
Posted on 9/16/20 at 2:50 pm to rickgrimes
A bunch of refineries are converting to biodiesel right now. It's not because people want more green energy, it's because the profit margins are better. The glut in oil & gas is so big right now, they can't make any profit refining traditional gas and diesel, so they are converting to other uses instead of shutting down the whole plant. HFC in Cheyenne is an example of a huge refinery that is completely shut down right now, Phillips is doing the same at it's huge refineries in California. Those companies are exploring options for other uses instead of keeping them shuttered. What gets me is why gas is still almost $2/gal if there is still so much available everywhere.
This post was edited on 9/16/20 at 2:53 pm
Posted on 9/16/20 at 2:52 pm to rickgrimes
LOL, we're 50 years from getting off oil.
Posted on 9/16/20 at 2:58 pm to rickgrimes
Not that long ago Exxon made typewriters and had a land development company for residential homes. They had scientists that were integral to the development of lithium batteries. Just lacked long term thinking.
Posted on 9/16/20 at 3:20 pm to rickgrimes
Jody is already working on the transition
Posted on 9/16/20 at 3:22 pm to rickgrimes
We will be using oil for the next 100 years.
Posted on 9/16/20 at 5:27 pm to rickgrimes
Oil, the commodity is not going anywhere anytime soon.
But investing your money O&G companies right is not bright.
We have been on a bull market run under Trump, but the energy sector has lagged big time. Expect that general trend to continue.
But investing your money O&G companies right is not bright.
We have been on a bull market run under Trump, but the energy sector has lagged big time. Expect that general trend to continue.
Posted on 9/16/20 at 7:20 pm to rickgrimes
No. This is what execs do during a small downturn. They drive down the stock price so they cab grab more for themselves Or as part of a buyback.
They wrote the same articles before the shale boom
They wrote the same articles before the shale boom
Posted on 9/16/20 at 8:02 pm to rickgrimes
quote:
Most senior executives simply don’t believe hydrocarbon prices will ever come back to the above-$100-a-barrel days for any sustained period. And the social, and investor, pressure to tackle climate change is unlikely to abate.
This is just BS. 15 years ago they said we’d never see below $80bbl again!!! Peak oil, etc... seriously I’ll take this with a grain of salt. Oil isn’t going anywhere and will continue to be dominant.
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