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Exxon mobil to launch new global trading unit.

 Exxon­Mobil is plan­ning a renewed push into energy trad­ing to take on rivals such as Shell and BP that have long leaned on buy­ing and selling com­mod­it­ies to buoy profits. The US oil super­ma­jor is estab­lish­ing a new busi­ness line called Global Trad­ing that will pull together the com­pany’s «expert­ise from across the com­pany in global crude, products and feed­stocks, nat­ural gas, power, and freight trad­ing», Exxon, long con­sidered the most con­ser­vat­ive of the oil super­ma­jors, has his­tor­ic­ally focused more on its oil, gas and fuel pro­duc­tion than higher-risk energy and deriv­at­ives trad­ing. Exxon pro­duces about 3.8mn bar­rels of oil and gas equi­val­ent around the world and sells about 5.4mn b/d of fuel

Exxon Mobil

products, along with a large chem­ic­als pro­duc­tion busi­ness, giv­ing it an extens­ive pres­ence across global energy mar­kets.The new divi­sion is aimed at ‘driv­ing com­mer­cial intens­ity’ and ‘deliv­er­ing industry-lead­ing res­ults’

The energy trans­ition was always going to be a dirty busi­ness. BP this week rowed back from its 2020 cli­mate com­mit­ments, includ­ing the head­line pledge to cut pro­duc­tion 40 per cent by 2040. BP couched its move in terms of a changed world fol­low­ing Rus­sia’s inva­sion of Ukraine. It will invest in and pro­duce more fossil fuels in the near term and sell fewer of its assets so that pro­duc­tion falls only about a quarter by 2030 com­pared with 2019.


Emis­sions from its oil and gas busi­ness will drop 20 to 30 per cent rather than 35 to 40 per cent. True, BP raised its invest­ment plans by $1bn in fossil fuels and trans­ition busi­nesses. «If you accept the world is chan­ging quicker than you thought but put half your money into old tech­no­logy that’s not turn­ing the ship,» said Kings­mill Bond, energy strategist at clean energy non-profit RMI. BP’s shares have not hugely under­per­formed its cli­mate-con­scious European peers, but they have all been out­stripped by the oil­ier Amer­ican com­pan­ies.


Amid talk about transat­lantic bids and investor scep­ti­cism about returns in low-car­bon busi­nesses, this is an attempt to change the mood. BP is cut­ting its oper­a­tional emis­sions, scope 1 and 2 in the jar­gon, faster than expec­ted. In low car­bon, less money is going to long-dated, lower-return busi­nesses such as renew­ables and more to areas like elec­tric vehicle char­ging and con­veni­ence stores. In oil, the man­tra is basic­ally more quick bar­rels to cap­it­al­ise on higher than expec­ted oil prices.


Com­pare that to Exxon­Mobil, which will put maybe 8 per cent of invest­ment into «lower emis­sions» this year. BP, with roughly half Exxon’s oper­at­ing cash flow last year, plans a $60bn invest­ment in low-car­bon busi­nesses to 2030. If BP can be rewar­ded by investors for that, as Europe’s energy dino­saurs thrash around look­ing for a postaster­oid future, it prob­ably counts as pro­gress. 


www.sba.tax


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  1. Stan10 February 2023 at 13:57

    If BP goes all in on their decision to back from their climate commitments that would be a mistake. While they do need to make some changes to those initial plans, going too far will lead to many problems for them. They need to still invest heavily in new technology while also using old one as much as possible.

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    1. Ted10 February 2023 at 14:57

      Yes, they must not use the war in Ukraine or other factors as excuses to back down. They need to modify their plans but not turn back. Their business will eventually suffer if they aren't trustworthy and don't do what they say they will.

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