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rickgrimes
LSU Fan
Member since Jan 2011
3365 posts

Bloomberg: Big Oil Goes Looking for a Career Change
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 at 2:21 pm


goofball
LSU Fan
Member since Mar 2015
7663 posts

re: Bloomberg: Big Oil Goes Looking for a Career Change
quote:

“People may not know—BP sells coffee.


They probably contaminated that too.


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315
Cosmo
Houston Astros Fan
glassman's guest house
Member since Oct 2003
101401 posts

re: Bloomberg: Big Oil Goes Looking for a Career Change
Oil isnt going anywhere. We dont just use oil for fuel.


jimbeam
USA Fan
University of LSU
Member since Oct 2011
64196 posts

re: Bloomberg: Big Oil Goes Looking for a Career Change
Peak oil!!


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160
dewster
LSU Fan
Chicago
Member since Aug 2006
17875 posts

re: Bloomberg: Big Oil Goes Looking for a Career Change
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.


rickgrimes
LSU Fan
Member since Jan 2011
3365 posts

re: Bloomberg: Big Oil Goes Looking for a Career Change
quote:

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.

Even their dividends aren't enough to make up for a -50% return over the last 5 years, which is especially horrific when you consider the historic bull market we have had during that period. You are better off leaving that money in your checking account earning 0.01% interest than 'investing' in XOM, or you could just throw money out of your car window everyday going down the freeway, at least that would be more interesting.
This post was edited on 9/16 at 2:56 pm


Colonel Flagg
New Orleans Pelicans Fan
Baton Rouge
Member since Apr 2010
18630 posts

re: Bloomberg: Big Oil Goes Looking for a Career Change
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.


wutangfinancial
LSU Fan
Dallas, TX
Member since Sep 2015
4534 posts

re: Bloomberg: Big Oil Goes Looking for a Career Change
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 at 2:26 pm


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141
crazyLSUstudent
LSU Fan
391 miles away from Tiger Stadium
Member since Mar 2012
3464 posts

re: Bloomberg: Big Oil Goes Looking for a Career Change
O&G is going to get hammered over the next 10 years as more and more electric vehicles come online


dewster
LSU Fan
Chicago
Member since Aug 2006
17875 posts

re: Bloomberg: Big Oil Goes Looking for a Career Change
quote:

-50% return over the last 5 years.


I didn't own the stock 5 years ago. My costs basis per share is right under $40 per.

I'll continue buying a little at a time over the next few years when I notice the price dropping below $40. And I'm prepared to hold onto it for a while.
This post was edited on 9/16 at 2:34 pm


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NYNolaguy1
LSU Fan
Member since May 2011
18959 posts

re: Bloomberg: Big Oil Goes Looking for a Career Change
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.


tiger7166
LSU Fan
Louisiana
Member since Dec 2007
2077 posts
 Online 

re: Bloomberg: Big Oil Goes Looking for a Career Change
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?


Klark Kent
LSU Fan
Houston via BR
Member since Jan 2008
49422 posts

re: Bloomberg: Big Oil Goes Looking for a Career Change
quote:

O&G is going to get hammered over the next 10 years as more and more electric vehicles come online




jimbeam
USA Fan
University of LSU
Member since Oct 2011
64196 posts

re: Bloomberg: Big Oil Goes Looking for a Career Change
Powered by electricity created by gas fired plants, via batteries created by gas fired equipment
This post was edited on 9/16 at 2:28 pm


wutangfinancial
LSU Fan
Dallas, TX
Member since Sep 2015
4534 posts

re: Bloomberg: Big Oil Goes Looking for a Career Change
quote:

O&G is going to get hammered over the next 10 years as more and more electric vehicles come online



They'll get hammered because we've temporarily hit a peak in aggregate demand while they simultaneously have never had cheaper means to extract it.


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103
michael corleone
LSU Fan
baton rouge
Member since Jun 2005
2464 posts

re: Bloomberg: Big Oil Goes Looking for a Career Change
Soon as Covid ends and people are driving again, demand will go up and so will prices. There aren’t 5% electric or LNG vehicles on the road all of a sudden. People have not driven very much since March. There was a supply glut at that time and an additional market flood by Russia. Oil isn’t going anywhere anytime soon.


redneck hippie
Tulsa
Member since Dec 2008
3726 posts

re: Bloomberg: Big Oil Goes Looking for a Career Change
quote:

O&G is going to get hammered over the next 10 years


not sure about 10 years but my company's outlook is it will not be over $50/bbl through 2022. which sucks for us.


The Torch
LSU Fan
DFW The Dub
Member since Aug 2014
12719 posts

re: Bloomberg: Big Oil Goes Looking for a Career Change
That WTI hit 39.00 today

Don't Call It A Comeback


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32
griddle
Member since Jan 2017
55 posts

re: Bloomberg: Big Oil Goes Looking for a Career Change
quote:

O&G is going to get hammered over the next 10 years as more and more electric vehicles come online

And where will the electricity come from to charge all these vehicles?

Natural Gas power plants are the most efficient plants for making electricity and it's not even close. You can't charge an electric car with a football field of solar panels much less all the other electricity needed to maintain society.

Ask California how their "renewable clean energy" is working out for them. They are literally begging people to not charge their Teslas, rolling blackouts, etc.

O&G won't be going anywhere for a very, very long time.


Hamma1122
Member since Sep 2016
10598 posts

re: Bloomberg: Big Oil Goes Looking for a Career Change
Lol


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