Why can't ExxonMobil cut capital investment in oil and gas and invest in H2 from solar and may be buy an electric car company and then grow it? Instead of spending $10-20 billion on more oil and gas why not new energy? Wall Street will love and PR will improve as ExxonMobil goes green. And this can create new jobs.
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I hope the OP has no business role in EM, because he or she is showing a total lack of understanding of the situation. EM has today a rotten production assets portfolio, that seems to break even at $65, hence nothing but losses this year. EM was desperately investing before the pandemic in order to upgrade the portfolio with profit making assets, but even in early 2020 it was running out of money. Renewing the portfolio and paying the dividends have pinned the company between a rock and a hard place, and now even continuing to borrow money is almost out of the question. Next year EM is likely to stop paying dividends, but even that will not free enough money to transition the portfolio, while likely to collapse the share price. There’s even speculation of asset sales, at fire prices. When the company is in a real danger of not having enough money to fund its core business, how on earth would it go into fancy, high-risk ventures outside its core business ? That could be an option after a renewal of the portfolio coupled with a major upturn in oil prices, when the core business will have generated enough billions to try something new.
@fnk+18aSyxNv - Well said. I have extensive large scale H2 experience and I agree 100% with your assessment. Itll be an easy transition if and when it makes any sense.
Mainly because neither of those 2 technologies are making money. It's all about ROI and neither of those 2 can compete.
We should just merge with Tesla. Become Tesla Global Fuels Company.
Tesla service trucks still use diesel. And SpaceX's rockets use liquid methane.
It's the only way XOM shares are going to the moon.
Interesting post. The Company is missing a very obvious synergy from a burgeoning market. The only way to make commercial quantities of hydrogen is by cracking methane with steam. The process generates much steam and heat which provides cogenerated power and the emissions are easily reduced in bulk with hydrogen as the product. Natural gas and hydrogen!
Good point. I too have this business instinct - even working on the side.
I tried a transition along these lines.
On weekends, I'm a vendor at football stadium of unnamed major college (mascot: A##ies).
Transitioned from 'Touchdown Hot Dogs' to 'Gridiron Steaks'.
Then the covid.
Wrong people leading. Consultants told them they won’t succeed and can’t compete with others outside of oil and gas sandbox. Maybe they are right since we aren’t even #winning at what we proclaim is our core competency.