HOUSTON (Reuters) – ExxonMobil Corp is facing losses of about સુધીમાં 48 billion by 2021 amid a bad-time stakes on rising demand, according to Reuters’ Tally and Wall Street estimates that the situation in the U.S. The top oil company will have to make deep cuts. To its staff and project.
File photo: October 27, 2016, Illinois, U.S. An exon sign is found at a gas station in the Chicago suburb. Ritter / Jim Young / File photo
Investors on Wall Street are also worried about the one-time Sacrocent dividend at Exxon, which became the world’s most valuable company in the 20th century using global scale, relentless expansion and tight financial control.
Exxon has seen a series of shocks over the past decade and the U.S. under Chief Executive Darren Woods. Shell demanded a return to the previous name by big bets on oilfields, pipelines and global refining and plastics. It also makes big bets on Guyana, where it has discovered 8 billion barrels of oil, a six-year production at its current rate.
But Exxon’s ability to finance global expansion is no longer guaranteed. The company has borrowed 23 23 billion this year to pay its bills, nearly double its arrears. In July, it posted its first back-to-back quarterly loss. According to Refinitive, it faces a full-year loss of 8 1.86 billion, excluding asset sales or write-downs.
The decline of approximately 48 48 billion by 2021 was calculated using cash from operations, commitments to shareholder payments, and costs for a large expansion program undertaken by Exxon. Now the company is launching a worldwide review of where it can cut costs, and analysts believe that once unreliable dividends are more likely to fall.
Job reviews, benefit cuts
The sharp drop in oil demand and prices this year has helped to revive production and earnings by expanding oil processing, chemicals and manufacturing, and Woods ’U.S. Plans to play a commanding role in Shell and Liquefied have been reduced to spending at least 30 30 billion by the year 2025. Natural gas, markets or then look promising.
Instead, it must prepare Exxon to work in its world of poor demand for oil, gas and plastics. The company has been dropped from the Dow Jones index of top US industrial companies after 92 years. It is facing harsh reviews from as many as 10% of U.S. staff that could leave thousands out of the company, and career employees who are taking an average retirement benefit of 30 years.
Exxon declined to make the executive available for an interview, and a spokesman said details of the cost cut would be revealed early next year.
“We are committed to our capital allocation priorities – investing in industry-beneficial projects, paying reliable and rising dividends, and maintaining a strong balance sheet,” said spokeswoman Casey Norton.
The review of ongoing projects now aims to “put us in a stronger position to increase efficiency and save additional costs” as the markets improve, he said.
(For a graphic on cash from operations and property sales, click here: here)
Oil prices have fallen 35 percent since early 2020 as demand declined during the COVD-19 epidemic. BP, Royal Dutch Shell, Total and Repsol and others have cut billions of dollars from the value of their oil and gas properties, which Exxon has yet to do.
European majors are also adding renewable energy tariffs and electricity to their portfolios, a hedge against a permanently reduced demand for oil and gas. BP plans to reduce its fossil fuel production by 40% by 2030. It plans to sell more fossil fuel properties if oil prices continue to rise.
Debt to nearby doubles
Exxon’s cash from operations operations compared to the investment plan already prepared this year and the funds needed for shareholder dividends – is estimated to be about .4 17.4 billion this year, according to a Reuters analysis.
The company’s share price has closed 0.08% higher on Friday since Woods became CEO. It has raised financial activity by raising debt to debt 23.19 billion this year, but has vowed not to borrow more, and most recently insisted in July that dividends be exorbitant.
Investors say it will be difficult to keep commitment. “At $ 41 or $ 42 [per barrel] Crude, you can’t put those puzzle pieces together and make sense of it, ”said Mark Stockkell, senior portfolio manager at Adams Fund, which has about 70 million shares in Exxon.
Stokesell said Exxon should reduce its dividend if the share price remains indifferent. “I have to give something. Wherever you go, the credibility of the management is damaged, ”he said.
The cuts for Exxon’s stock would be “catastrophic,” said Paul Sanki, an equity analyst at Sanki Research, after officials reiterated their importance in July.
Exxon’s weak cash flow worries investors who hold the stock for about 9% of its dividends. “Matrix Asset Advisors is on the watch list in terms of our conviction and their ability to defend and grow dividends,” said David Katz, chief investment officer of the New York-based company.
Costs and of course costs
Exxon will cut spending in the Permian Basin shell sector this year, which will be about 3 3 billion from its original 7. 7.4 billion budget, consultant Rystad Energy estimates.
The company has said it plans to reduce the number of drilling rigs from 55 to 15 or less earlier this year, and senior vice president Neil Chapman said in a July call. Spending on refining and chemical plants that take years to design and complete, “is really a question of suspension,” he added.
A spokesman for Exxon said the 10 10 billion chemical plant in China is subject to permits. The spending limit will further restrict its oil, refining and plastics businesses and may put some pressure on the company.
“Each of our major businesses can be a powerhouse in its own right,” Woods said when he launched the vision in early 2017. At the time, he was pushing for a call to close the business to promote back-to-back returns.
Woods stuck to its growth targets last year, with this year’s potential earnings of oil. That forecast includes 2020 cash flow and asset sales targets that cannot be met after the epidemic hits.
(For a graphic of Exxon’s capital and research costs, go to: here)
Analysts said Woods must dial back. The cost of the project could be between 10. 10.4 billion and ધા 15 billion next year, according to ScotiaBank and RBC Capital Markets, half the original estimate.
LNG There is no urgency for
Some project schedules are quietly stretched to save costs.
Construction on the more than બ 10 billion LNG facility in Texas where Exxon has a 30% stake was already moving at a slow pace and is now “not in a hurry,” said Wood McKenzie, a consultant and data company. It expects its start to be delayed by a year, as early as 2025.
A major LNG project in Mozambique will probably not receive a final investment decision until 2023, as the expansion of Exxon LNG exports to Papua, New Guinea, has been delayed by government negotiations and lower LNG prices.
“The reality is that Exxon isn’t moving forward with anyone in the near term,” Manten said.
In Mexico, according to people familiar with its operations, Exxon will likely reduce offshore activity after it was not a good commercial at first. Instead, it will focus on fuel imports and retail sales, they said.
Exxon has begun exploration drilling in Brazil, where the company returned in 2017, second only to state-controlled Petrolio Brasilero SA in holding Fashore Exploration Exploration 2017. But “costs and activity suspensions cannot be ruled out as part of any cost reduction,” said Ruraid Montgomery, director of Vibilance Energy tics Analytics.
Other projects have already begun, including a 1. 9.9 billion expansion of its Beaumont, Texas, refinery, which has been postponed for a year.
Exx declined to comment on the cost of LNG, Mexico or Brazil.
With the exception of Guyana, “there will be no other holy cow in the near-term budget,” said Paul Cheng, an analyst at ScotiaBank.
(Graphic: ExxonMobil cash flow from operations operations and asset sales – here)
(Graphic: Exxon pulls back on capital and research costs – here)
Reporting by Jennifer Hiller in Houston and Mariana Pollen in Mexico City; Edited by Gary McVilliams, David Geffen and David Gregorio
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