Bp Share Discussion Threads

[sarkasm] 30/10/2021 22:01

Oil Majors Won’t Come Running to Help World Facing Energy Crunch

Kevin Crowley and Laura Hurst, Bloomberg News

(Bloomberg) -- The world’s biggest energy companies are producing the most cash in years, but don’t expect them to spend it on bringing on fresh supplies of oil and natural gas to combat shortages in Europe and China this winter.

Exxon Mobil Corp., Royal Dutch Shell Plc and Chevron Corp. confirmed this week that, for the most part, they’ll spend their windfall profits on share buybacks and dividends. Capital expenditures will rise next year, but the increases come off 2021’s exceptionally low base and within frameworks established before the recent surge in fossil-fuel prices.

It’s a step-change from previous energy rallies, such the early 2010s when emerging U.S. shale plays and fears over fossil fuel shortages prompted a massive upswing in capital spending. That boom ended painfully for the industry, with overproduction and a lack of cost control. This time around, Big Oil appears content to take the cash and hand it over to shareholders, who are both weary of poor returns over the last decade and concerned about the companies’ significant climate risk.

“It’s not so long ago they got creamed by prices collapses so it’s not surprising they’re a bit gun shy on capex,” said Stewart Glickman, a New York-based analyst at CFRA Research. “It’s almost like they’re stuck between two extreme populations — the ESG crowd and cash-flow hungry shareholders.”

Producers can satisfy both groups by simply not ramping up spending on fossil fuels. But that’s bad portent for consumers crying out for more supply. Europe and Asia are currently competing for natural gas, sending prices to record levels, while the U.S. and India have asked OPEC+ to produce more oil. China has called on state-owned companies to secure energy supplies at any cost.

Chevron is perhaps the best example of a company turning away from the punch bowl. The California-based oil giant generated the most free cash flow in its 142-year history during the third quarter but intends to keep capital spending 20% below pre-Covid levels next year while increasing share buybacks. Its 2022 capital budget will come in at the low-end of its $15 billion to $17 billion range, according to Chief Financial Officer Pierre Breber, some 60% below 2014 levels.

Low-Carbon Pivot

“Over time the vast majority of the excess cash will return to shareholders in the form of higher dividends and the buyback,” he said Friday on a conference call with analysts.

Even Exxon, until last year the poster child for doubling down on fossil fuels, is now more reticent with its cash. The Texas-based energy giant announced a surprise stock buyback Friday and locked in long-term annual spending in the low $20 billion range, a cut of more than 30% from before the pandemic.

Furthermore, almost 15% of Exxon’s budget will go toward low-carbon investments, a significant departure from its previous strategy and just months after activist investor Engine No. 1 persuaded investors to replace a quarter of its board. The clean energy spending provides “optionality and builds resiliency into our plans,” CEO Darren Woods said.

Shell -- which faces pressure from an activist investor as well after Dan Loeb’s Third Point LLC revealed this week it took a stake in the company -- is even more reluctant about spending on its traditional oil business. Less than half of its capital spending will go toward oil, with the bulk directed at gas, renewables and power.

“We will not double down on fossil fuels,” Shell CEO Ben Van Beurden said this week.

[spacecake] 30/10/2021 14:09

Why Big Oil is about to experience its “Big Tobacco” moment
A historic congressional hearing with oil executives may not have produced a smoking gun, but the tobacco industry has showed how cover-ups unravel slowly.

By India Bourke


Workers extract oil from oil wells in the Permian Basin in Midland, Texas. Photo by Benjamin Lowy/Getty Images
Nearly 30 years ago, the CEOs from America’s seven big tobacco firms denied under oath that they considered nicotine to be addictive. It was truly a “smoking gun” moment. The claim was so clearly at odds with reality that millions of damning documents were consequently exposed, public opinion gradually turned, and the Republican Party abandoned its support for the industry. Now, the world’s leading Western oil executives have begun a process that could lead to a similar fate.


On Thursday (28 October), the CEOs of BP, Chevron, ExxonMobil and Shell, alongside the president of the American Petroleum Institute (the industry’s biggest trade association), appeared for questioning in the US Congress. Accused of deceiving the public about climate change risk, the executives were faced with a choice: admit past mistakes in failing to convey the existential threat that fossil fuels pose to the planet, or obfuscate and deny what was already known and risk a similar undoing to that experienced by Big Tobacco.

They chose to obfuscate and deny.

Presented with clear warnings from the company’s former scientists and a 1997 statement from Exxon’s former chief executive arguing that the evidence on climate change was “inconclusive”, Exxon’s current head, Darren Woods, still claimed that his predecessor’s response was “consistent with the science of the day”.

Furthermore, when asked if they would “commit to no longer spending any money, either directly or indirectly, to oppose efforts to reduce emissions”, the CEOs refused. Instead, they chose only to repeat their commitment to a low-carbon transition.

“Would any of you commit to having an independent audit to ensure none of your funds are going to climate denial?” asked Ro Khanna, a Democrat congressman for California. Silence.

In emphasising their concerns over global warming, the CEOs continued to obscure their role in perpetuating the largest threat of our time. But don’t forget that with a smoking gun you can see the smoke only after the weapon has been fired. And so it is likely to be with Thursday’s hearings. The testimony is part of a larger investigation conducted by the House Oversight Committee’s environment panel that will now involve subpoenaing millions of documents from oil companies and trade groups.

“This hearing is the first of hopefully many into what’s going on. That’s what happened with Big Tobacco in the 1990s,” says Jamie Henn, co-founder of the NGO 350.org.


The wider aim of the congressional investigation is not just to expose what the fossil fuel industry covered up in the past, but to reveal the extent of money flowing to anti-climate action propaganda and lobbying today.

“For all the skeletons we have already found in Big Oil’s closet, we are still only looking through the keyhole,” says Geoffrey Supran, a research fellow at Harvard. “This is where congressional authority to request documents comes in, and where the historical significance of this moment really lies.”

The historic significance could be manifold and extend public understanding of climate disinformation. Analysis shows that 139 elected Congress officials still refuse to acknowledge that climate change is human-made, despite scientific acceptance that this is the case.

Supran and others argue that today’s climate disinformation tactics are more subtle than outright denial and are aimed instead at using the industry’s vast marketing and lobbying apparatus to delay or distract from positive action on climate change. In 2016, InfluenceMap showed that more than $100m a year was spent by fossil fuel groups on obstructive climate lobbying.



For many watching the hearings, the statements given this week by the CEOs and Republican congressmen were themselves disinformation. The industry’s talk of reducing emissions is a key part of this strategy, says Supran, as it is “mostly greenwash” and plays to “fossil fuel saviour” rhetoric. The UN and the International Energy Agency insist that new oil and gas development must end if global emissions are to be brought down to net zero by mid-century and dangerous levels of climate change avoided. Exxon and Chevron are poised to double down on investment.

The CEOs also played up their industry’s “essential role in modern society”, something that Khanna dismissed as “American apple pie speech”. And there was repeated mention of China’s rising emissions and trade threat, a distraction from the issue at hand.

“What’s been missing on the part of the public is a clear understanding that this industry knew about, lied about and is continuing to block climate action,” says Henn. “And I think once that’s understood in the same way as it was reached with tobacco it could be a real cultural tipping point.”

Increased awareness of disinformation tactics could, in turn, support legal and political action against the industry around the world.

Various state-level climate lawsuits are going back and forth in the US courts, and successful legal action is happening in other countries. Nine de Pater, a researcher and campaigner at Milieudefensie (Friends of the Earth Netherlands), says the biggest lesson learned in its successful 2019 court case against Shell was that the science could be used to hold the company to account. “What is now happening in the US is another example of how we can show the true face of fossil fuel companies,” she says.

Ultimately, a shift in public awareness could help loosen the industry’s stranglehold over American politics. “It is my hope,” Khanna told the New Statesman days before Cop26 before began, “that this hearing shows the world the US is serious about tackling climate change and holding bad actors accountable ahead of President Biden’s trip to Glasgow.”

[31337 c0d3r] 30/10/2021 11:45

How much is the cheapest electrolyser system to produce hydrogen at home from the unused portion of solar pv?

[spacecake] 30/10/2021 10:42

Thanks for that, interesting couple of weeks coming, the sceptic in me says it's business as usual with the climate can kicked down the road, without an radical exploration reduction plan it will all be for nothing IMV.

Politicians have the power but are too timid to use it, Boris seems far too happy playing in the infants schools (all powerful) but struggles to answer teenagers pointed questions.

Cumbria has just dodged a massive, expensive disruptive weather related flooding event.

[charlie9038] 30/10/2021 09:21

Interesting thanks for sharing, have copied and will post on other oems.

[grupo guitarlumber] 30/10/2021 09:05

Shell, BP, TotalEnergies take steps on greener service stations
29 October 2021 Cristina Brooks

Three oil majors have separately signed deals that could see them greening their existing networks of service stations in Europe and the US by offering electric vehicle (EV) charging, hydrogen fuel, or both.

The agreements track policy developments. In a decidedly pro-EV and hydrogen policy move, the EU last month expanded financing arrangements and also started to tender for EV charging point construction under the Alternative Fuels Infrastructure Facility. A fast-charging station will be built every 60 kilometers along highways, and a hydrogen filling station for heavy transportation will be built every 150 kilometers.

Currently, the EU offers five fast public chargers every 100 kilometers, according to Finland-based EV charging platform Virta.

The new program will allocate $1.73 billion (€1.5 billion) per year to build EV charging, LNG bunkering, and other alternative fuel infrastructure on trans-European road and rail networks.

In the US, Tesla is building a fast-charging network, and President Joe Biden has pledged that the federal government will set up 500,000 charging units in five years, though funding for that promise has yet to materialize in the spending bills that are being debated by the US Congress.
EV charging every 150 km in France

TotalEnergies plans to spend up to $230 million (€200 million) to install EV charging points at 200 of its service stations along highways in its home country of France by 2023.

By then, TotalEnergies also aims to offer to its French customers "a high-power charging station every 150 kilometers," including 100 stations in urban areas, it said on 28 October.

The move expands on its existing French and global EV charging offering. The company's portfolio includes installed or planned EV charging point networks in Paris (2,300), Amsterdam (22,000), London (1,700), and Singapore (1,500).

Not only will it build its own EV charging points in France, but it plans to compete in tenders held by French road operators to install even more chargers.

The company appears to be following the pattern it set elsewhere in Europe. In September, it won a Dutch state tender to equip the city of Antwerp with EV charging points, for which it will also provide renewable energy, for example from offshore wind farms.

Moving into renewable energy trading and generation is part of TotalEnergies' net-zero strategy, which aims for low-carbon electricity making up 40% of its sales mix by 2050.
Hydrogen network mulled in the UK

BP and the truck division of German automaker Daimler, which also owns the Mercedes-Benz brand, have agreed to study the feasibility of up to 25 hydrogen refueling stations across the UK by 2030, according to a 27 October statement.

BP would build, operate, and supply the stations fueled with green hydrogen, while Daimler would supply hydrogen-fuel cell trucks to its UK customers starting in 2025.

"Hydrogen is critical to decarbonizing hard-to-abate sectors—and for heavy and long-distance freight it is sometimes the only answer," said Emma Delaney, BP's executive vice president for customers and products.

BP pledged to grow its hydrogen business to a 10% share of core markets in its 2020 energy transition plan.
EV, hydrogen "opportunities" in the US

Shell Oil Products US' retail subsidiary plans to acquire 248 Timewise-brand convenience store and fueling station sites in Texas from Landmark, it said in a 26 October statement.

The acquisition will also allow Shell to grow its store sales and retail footprint in the US, where its wholesalers, dealers, and joint venture partners operate over 13,000 Shell-branded sites.

Shell said the deal would allow it to offer customers more EV charging, hydrogen, biofuels, and lower-carbon premium fuels, but it would do so "in step with society" per its Powering Progress strategy.

Under the strategy, Shell said it would invest between $1 and $2 billion every year in low-carbon energy such as charging for EVs, hydrogen, biofuels, and electricity generated by wind and solar power, depending on demand.

Shell, which has come under legal pressure to cut carbon emissions in its home country, just this week added an absolute emissions target to its existing goal of reaching net-zero emissions by 2050, covering its operations and the emissions from energy products it sells.

At the same time, the company fended off investor suggestions that it should spin-off its renewable activity. Eni appears to be starting a trend for oil majors with this month's announcement that it would sell its joined-up retail and renewable business.

Posted 29 October 2021 by Cristina Brooks, Senior Journalist, Climate & Sustainability, IHS Markit

[planit2] 29/10/2021 20:18

Well one thing that made me laugh was if RDS can lose $5bn in a qtr trading then BP could make $5bn.

That would result in a move higher.

I am still hoping for $1.5bn-$2bn in buybacks announced. That is a run rate of 7% of market cap per year.

Also $1.07 underlying profit per ADS which is around $3.5bn profit.


I still think buying the renewable assets early due to Looney's clear plan is going to be a shrewed move, RDS panicking and over-paying later on is going to be much more expensive. Hopefully by then BP will have moved it's attention to taking over the world's hydrogen industry.

I have waaay too many of these so the results better be good. :)

[dovey21] 29/10/2021 16:48

I sold up my RDS yesterday and added here. It's a diabolical performance.

[marktime1231] 29/10/2021 15:44

Beats from Chevron and Exxon. Quite a few analysts backing Shell as a Buy despite their rubbish report, but the share price still sliding suggests punters are not so sure.

[hellscream] 29/10/2021 15:08

green makes no money,its just a charity.

[hellscream] 29/10/2021 15:06

they are using us to buy all this green rubbish, barclays has already said all the green assets are not valued by the stockmarket. waste of money.

[richvandam] 29/10/2021 14:37

Exxon results were ridiculous, who would have thought they would come out of all this the strongest. Never cut the dividend and just increased it and added share buy backs…..I feel sick.
I had my money on BP being the top performer. I sincerely hope the management at BP start thinking about restoring the dividend back to pre-Covid norms, we are all sick.

[meb123] 29/10/2021 13:25

There is one downside risk.... If you are invested for the long term .Try telling that to the Vodafone punters lolSorry I know this is a BP thread.....

[geckotheglorious] 29/10/2021 12:22

Decent results from Chevron.
One presumes Exxon will also beat.

Leaves Shell looking ronery as the exception with its miss.

[marktime1231] 29/10/2021 11:50

There is no downside whichever way the share price moves, if you are invested here for the long term.

If the share price tanks, and I see no reason for that, it reinforces the effectiveness of the buyback which will progressively and permanently enhance dividends. It might even tempt you to add some, and why not.

If the share price advances it means you have a fat blue line in your portfolio, and might encourage the board to increase dividends to keep the yield up. You might trade a few to rinse some gains with a view to buying them back later, or just sit tight and enjoy.

[meb123] 29/10/2021 11:08

It's been reported that one of the reasons for the recent weakness in the price of oil is the possible of Iran supply coming back as the parties now want to talk. Talking is fine but getting an agreement with Iran is a whole different kettle of fish . I mean why would there be if Iran's aim is to build a bomb and I hear they are quite close to it. Israel cannot be a happy bunny in the circumstances.

[meb123] 29/10/2021 10:56

Interesting read from investing cube . You can google it yourself if you want . It says if it passes 385p , then good chance of getting to 500p. However for pessimists , the downside risk is to 315p. Personally being heavily invested here , I like to think there is a floor to the downside from 350 and owe the recent weakness due to the slide in the oil price .

[charlie9038] 29/10/2021 10:16

Double parked, yellow tickets issued.

BP going well today, perhaps Shell leavers joining here for Q3 Earnings on 2 Nov

GLA

[hazl] 29/10/2021 10:13

If we knew that with every stock,hey.

[spawny100] 29/10/2021 10:12

Ok thanks. I misunderstood you then. My apologies. But you were perhaps overly harsh? Anyway parked.

[klotzak] 29/10/2021 10:06

Fair one, I don't make those sort of profits, that's for sure, and I really doubt those that do are on ADVFN.

It does irritate myself and others when you get these chumps come in and start bragging, when actually their whole life may be say making those boasts because they have nothing else.

Parked!