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Remnants of Hurricane Zeta have been pelting New York with rain, which, you know, is great when it’s your first week with a puppy who needs to go out every 45 minutes. (Did I mention there’s also a cold front?)
Zeta is the 27th named storm this year, and one of the several hurricanes that disrupted offshore oil production and refining. Oddly, storms like these â€” made worse by burning fossil fuels â€” typically give oil prices a boost because they temporarily disrupt supply.
But the pandemic has proven to be a much more formidable force against the oil industry. On Thursday, crude prices fell to their lowest level since early June, as fears of a second wave cemented, so it’s no surprise that companies continue to reduce spending.
Let’s get to it.
On Thursday we were the first to report that Exxon Mobil is making major cuts to its global workforce, which stood at more than 88,000 last year.
- The company expects to cut 15% of its workers through 2022, including both employees and contractors.
- Up to 1,900 workers in the US will lose their jobs as part of those cuts. Most of the impacted roles are in the Houston area.
- Exxon already announced layoffs in Europe and a voluntary redundancy program in Australia.
- The company has also been shrinking its headcount through an annual performance review process.
Read more: We got our hands on internal documents that detail a timeline for the layoff and how the company will determine who it affects. You can find that here.
In other news: Exxon announced earnings on Friday morning, reporting a loss of $US680 million.
- It’s the company’s third-straight quarter of losses.
- US rival Chevron also reported a loss in the third quarter, of about $US200 million, while European majors Shell and BP posted profits this week.
What big oil companies are saying about the election
Not much! They love to talk about not wanting to talk about politics. But it’s clear that the results of the election will have huge implications for their industry. Here’s what they said on earnings calls this week:
- BP: “We’re not politicians,” Bernard Looney, the company’s CEO, said. “We work with whatever government is in power.” The London firm has a large operation in the US, though it doesn’t expect fracking restrictions â€” which could accompany a Biden presidency â€” to impact BP.
- ConocoPhillips: “Elections have consequences,” Matt Fox, the company’s COO, said. ConocoPhillips has a large operation in Alaska, a centre point in the political battle between environmentalists and oil companies. Fox told investors the company has projects on federal land in Alaska, but he doesn’t think a restriction on fracking there will have a big impact on the company’s production.
- Chevron: The company’s CFO told investors Friday that about 10% of its acreage in the Permian basin (including Noble Energy, which it recently acquired) is on federal lands.
The bottom line: A ban on new drilling leases on federal lands, as Biden has proposed, is unlikely to have a major impact on the US oil industry, Artem Abramov, an analyst at Rystad Energy, said in a webinar this week.
- “If fracking is banned on federal land, we’ll see gradual activity migration towards private and state-owned assets,” he said.
- Companies are also frontloading leases on federal land ahead of the election, he said.
4 stories that caught our attention this week
- I loved this New York Times visual feature about how each state makes electricity.
- Chevron is laying off about a quarter of Noble Energy employees, after the US oil giant bought Noble earlier this year, the Houston Chronicle reported.
- Check out Axios’ interview with Lynn Jurich, Sunrun’s CEO. She explains how the pandemic has changed consumers’ relationships with their homes and the implications of the election.
- Japan and South Korea are the latest countries to announce pledges to become carbon-neutral by 2050, multiple outlets reported.
That’s it for this week! Have a great weekend.
Ps. Here’s another pic of my pup, Jumanji, taken just minutes ago. He has captured my heart and destroyed many things.
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