Tag Archives: ExxonMobil

There Will Be Oil

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Renewables are nice, but petroleum provides the profits, it seems. . .

By Gary S. Vasilash

In defining its purpose, energy company bp states, “Our purpose is reimagining energy for people and our planet.”

Apparently there’s not a whole lot of imagination at the company because it seems, according to reporting from Reuters, that said reimagination is going to be more of the same.

As the opening to the Reuters story has it:

“BP has abandoned a target to cut oil and gas output by 2030 as CEO Murray Auchincloss scales back the firm’s energy transition strategy to regain investor confidence, three sources with knowledge of the matter said.”

The whole notion of cutting oil and gas output by 40% by 2030 was announced in 2020. But that 40% was ratcheted back to 25% in February 2023.

That “abandoned” seems to indicate it is now closer to 0, if not all the way there.

As you may recall, bp came up with a moderately clever “Beyond Petroleum” slogan to play upon its name.

Seems like it is more like “Bullish (on) Petroleum.”

Meanwhile, over at ExxonMobil, when it announced its Q2 2023 financials, Darren Woods, chairman and CEO, stated, “We delivered our second-highest 2Q earnings of the past decade as we continue to improve the fundamental earnings power of the company.

“We achieved record quarterly production from our low-cost-of-supply Permian and Guyana assets, with the highest oil production since the Exxon and Mobil merger.”

Yes, oil is not going away anytime soon, EV investments notwithstanding

And while there are regulations around the world regarding the reduction of carbon emissions, how long are they going to stand if the market isn’t interested in those vehicles?

ExxonMobil Pumps More Black Gold

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Jed Clampett lives!

By Gary S. Vasilash

ExxonMobil announced its Q2 earnings last week, which includes both a 12% year-over-year revenue increase (to $90.06 billion) and a 17% profit increase (to $9.24 billion).

And what is more interesting: It recorded its highest production of oil in the company’s history: 4.4 million oil-equivalent barrels per day. That’s up 15% compared with Q1.

In reporting its numbers, the company states it is working with Air Liquide on achieving the capacity to produce “virtually carbon-free hydrogen” that will be used for industrial customers, not fuel cell vehicles.

It is working with a major fertilizer and ammonia producer, CF Industries, for a carbon capture and storage arrangement.

It has a company named Proxxima that takes “lower-value” gasoline molecules and transforms them into a high-performance thermoset resin, which can be used to build composite structures.

And there is a Carbon Materials operation that it hopes will turn “low-value, carbon-rich feeds from the company’s refining processes” into things like carbon fiber and polymer additives.

What isn’t here?

Anything in the way of a transition to electric vehicles.

But the company did note it has signed a non-binding memorandum of understanding with battery company SK On for up to 100,000 metric tons of lithium over multiple years from a “planned” lithium project in Arkansas.

Clearly the company is still knee-deep in oil and it doesn’t seem that that is going to change anytime soon.

EVs and Oil Investments

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By Gary S. Vasilash

Although there seems to be a propulsive inevitability of the electric vehicle such that by the time 2030 arrives we’ll all be rolling around in electron-powered machines, there are a few things that are making this seem less. . .inevitable.

Last week ExxonMobil announced it is acquiring Pioneer Natural Resources, an oil and gas exploration and production company, for $59.5-billion.

As ExxonMobil described this: “Together, the companies will have an estimated 16 billion barrels of oil equivalent resource in the Permian. At close, ExxonMobil’s Permian production volume would more than double to 1.3 million barrels of oil equivalent per day (MOEBD), based on 2023 volumes, and is expected to increase to approximately 2 MOEBD in 2027.”

Or simply put: More access to more oil.

Today Chevron announced it is buying Hess Corp. for $53-billion. Hess “is a leading global independent energy company engaged in the exploration and production of crude oil and natural gas with leading positions offshore Guyana, the Bakken shale play in North Dakota, the deepwater Gulf of Mexico and the Gulf of Thailand.”

Chevron “produces crude oil and natural gas; manufactures transportation fuels, lubricants, petrochemicals and additives; and develops technologies that enhance our business and the industry. We aim to grow our traditional oil and gas business, lower the carbon intensity of our operations and grow new lower carbon businesses in renewable fuels, hydrogen, carbon capture, offsets and other emerging technologies.”

With Hess it will most certainly grow its traditional oil and gas business.

McKinsey & Company just released its “Global Energy Perspective,” which looks at the likelihood of the industrialized world meeting the goal of keeping global warming growth below 1.5°C. There are four scenarios about the energy transition, ranging from “Fading momentum” to “Achieved commitments.”

In all cases they predict that oil will peak in 2030.

But then there is a question of what happens next: what is the angle of decline by 2050?

It could be big: as much as a decrease of barrels of oil by 50%

It could be small: as little as a 3% decline.

Odds are ExxonMobil and Chevron are betting on something closer to 3 than 50.

Which leads to a bit of wonder about the rate of adoption of EVs in the U.S.

As of August, J.D. Power had the share of EV sales in the U.S. at 8.6%. That number is a bit opaque because Tesla accounts for 63% of all of those EV sales, so it is not like EVs that aren’t Teslas are growing in ubiquity. (Even Ford has taken a shift out of the production of the F-150 Lightning, and F-150s (well, with combustion engines) are otherwise produced at such a rate that other vehicle manufacturers can only look on with envy.)

So while the number is easily going to be greater than 3% come 2030, perhaps the idea that EVs will be 50% of the market by 2030 is a bit too optimistic.