What happened in the Downstream's natural gas and liquids supply trading groups in the 3Q?
We had a 2Q loss in the mark to market trading of $700 million. No mention in the 3Q earnings report that I could find. Lost big $$$ in 1Q as well. In fact, we have been losing 1 to 2 billion on an annual basis since we geared up these groups in 2018.
Another Woods and company poorly conceived and executed strategy. Maybe we can disband these groups and payoff our debt with the savings.
So who is the trading VP and why aren't they PIP'd?
You all are right - if we're gonna Trade, let's unshackle it.
Enron style!
Think about it, every time our competitors post great trading results its EM on the other side of the deal hence they win and we lose……during the winter freeze we lost big time!
@scu — Good question! Just go to the trade floor on E3, 2nd floor and look around. All Engineers LARPing as traders because we can’t get any real traders to work here.
Setting a foot in the “real” trading world (beyond simply selling physical lots) was part of the brilliant strategy for the downstream called GVS (Grow Value and Simplify), sponsored by the F&L president PIPed last year.
Trading is so far away from the old Exxon culture that it was explicitly prohibited in the famous “Red Book” which had to be amended to make the move happen. To mitigate the (real) risks of trading, they put however so many controls on place they it just make the old stuff inoperative. How can you win in the Olympics 100m sprint race if you have to carry a 30 lbs rucksack? Or as we say in my neck of the woods (no pun intended): “you won't turn a donkey into a racing horse by simply cutting its ears”...
Then what type of traders come and work for us...?
I may be wrong, but I have heard we don’t give our traders profit-sharing. Hence no incentive for them to trade.
Plus we have stringent capital controls that go all the way up to Dallas which impedes many lucrative trades. Including the one when WTI went to negative $37 last year.
XOM is the only oil major that does not allow its traders to trade. And at the end of the quarter we ask why they are losing money. Duh.
Let them do their job and they will work wonders, like they do at BP, Shell etc.