Exxon’s Doubling Down On Oil And Gas

Exxon’s Doubling Down On Oil And Gas

about 1 year ago2 mins

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Oil giant ExxonMobil announced on Thursday that it’s upping its spending plans, underscoring its commitment to oil and gas.

What does this mean?

With more and more energy companies jumping aboard the green transition bandwagon, those that have stuck to fossil fuels look increasingly like dinosaurs. But here’s a newsflash: being a dinosaur can pay off. Naughty Exxon doubled down on old-fashioned fuels while its European competitors drifted toward renewables – and sky-high oil prices, kept aloft by the war in Ukraine, propelled the firm to record profit for two straight quarters. That helped send the irresistible bad boy’s shares up over 60% this year – far above better-behaved rivals like Shell and BP. And now Exxon, possibly encouraged by salivating investors, is doubling down yet again – quadrupling down, even. The firm plans to spend as much as $25 billion next year to meet global demand, up from $22 billion this year, as part of a wider bid to bring its oil and gas production to a record high by 2027.

Exxon stock

Why should I care?

For markets: Buyback bonanza.

Part of Exxon’s stellar stock performance has been down to its share buybacks: simply put, the firm’s buying its own shares, which limits what’s available and boosts the price of what’s left over. And there’s plenty more where that came from: the firm plans to buy back shares to the tune of $50 billion worth over the next three years. And it’s making some concessions to green-minded investors too, with more money set aside to reduce emissions and bury carbon underground.

The bigger picture: A hot sector on an overheating planet.

Exxon might not be doing the planet any favors, but it’s just done its workers a solid: the oil giant’s giving US employees an average salary bump of 9%, higher than current US inflation. That’s in stark contrast to previously lucrative fields like tech and finance, which have been shedding employees at lightspeed. Better get those job applications ready...

Oil worker pay
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