When the fogy fuel industry last winds down in the issue forth 10 , 2020 will stand as a pivotal year . Major corporation have been knocked off their pedestal , and there ’s no bigger fall than Exxon ’s .
Late on Monday , the companyannouncedit was writing down the value of oil and flatulence fields it had previously planned to make grow by as much as $ 20 billion . It ’s the biggest such writedown in Exxon ’s chronicle and suggestive of the immense insistence the pandemic and resultant economical slowdown have put on the company and the oil industry at - large .
In the promulgation , the society also said it would spend less on exploration , which make up sense given the huge drop in oil demand . It had antecedently planned to sink $ 30 billion on geographic expedition and other capital letter outgo every year through 2025 . Now , it ’s looking at spend $ 16 to $ 19 billion in 2021 and $ 20 to $ 25 billion after that through 2025 . Now , I ’m no vegetable oil psychoanalyst , but plan an increase in spending after 2021 seems pretty affirmative given the fact that we may have just passed peak oil color requirement and , with a Joe Biden presidency , the prospect of more racy climate policy ( or any climate insurance policy , really ) in the U.S. and globally seems a lot more likely . Turns out , I ’m not alone .
Exxon Chairman and CEO Darren Woods, third from left, joins the applause during opening bell ceremonies at the New York Stock Exchange in 2017. Oh, how times have changed.Photo: Richard Drew (AP)
“ In this environs , it make no sense to me at all . What ’s the hurry ? ” Mark Stoeckle , senior portfolio manager at Adams Funds , tell Reuters , cite Exxon ’s plans to boost investiture after next yr . “ I do n’t think it ’s go to help them with investors . ”
On its own , this raw of Exxon ’s historical writedown would be staggering for a company that has all but specify the American oil color manufacture for decennium . But it come after a serial publication of Earth - moving changes at the company . Even before the writedown , Exxon reported to the Securities and Exchange Commission that up to a fifth of its demonstrate crude militia — an economical term delineate by the SEC — couldlose that statusdue to humiliated oil colour prices . It haslost billionsover the first three quarter of 2020 , and the gratuitous twilight has led its caudex to plummet . Because of that , Exxon was booted from the Dow Jones Industrial Average after a 92 - year run . It ’s floundering is n’t just about money either ; the company also lost the spot as thelargest American crude oil companyto Chevron .
That has n’t stop Exxon from pay out shareholder a hearty dividend , which isaround $ 15 billion . But it has led the company to quest after layoffs ; in October , it announced a program toshed 14,000 jobs . Exxon ’s continued financial declination and layoffs even as it ante up out shareholders point to the danger of unmanaged decline for the oil industriousness .
I feel like a broken record saying this , but the coal manufacture is a vast warning of what that decline could look like if safe measures are n’t put in place for workers . Just last calendar week , St. Louis Public Radio reportedthat Peabody Energy is eliminating a healthcare benefit programme and life insurance for retired miners in what is just the later sign of how coal company ’ are miscarry the workers who made them gazillion . Biden ’s climate design include a call to help coal miner and community that sprung up around mine and power plants to get the benefit they deserve and modulation to the 21st century . But if the preceding yr has record us anything , oil and gas industry workers are going to need the same form of service .
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