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I don’t mean to stress you out but the election is now less than two weeks away. Here are some tips for voting in person.
Energy appeared again at the presidential debate. While Joe Biden said last night that he would “transition from the oil industry,” he reiterated that he wouldn’t ban fracking (though his plan does include a ban on new leasing on federal lands).
Anyway, we’re going to keep it short today, partly because â€¦ I’m adopting a pup in a few hours! Time will tell if it’s a good idea. Regardless, he’s very cute.
Here’s what stood out this week.
Exxon could soon announce US layoffs
In an internal forum Wednesday, Exxon’s CEO, Darren Woods, said he’s meeting with the company’s board next week and Exxon will let employees in North America know about potential job cuts shortly after.
The context: Exxon’s financial health has taken a hit and its stock is down, largely due to the collapse in oil prices. The company has been reviewing its operations on a country-by-country basis and looking for places to cut costs. Staffing is one of them.
- “We still have some significant headwinds, more work to do and, unfortunately, further reductions are necessary,” Woods said in an email to Exxon staff Wednesday.
- Exxon has already announced job cuts in Europe and a redundancy program in Australia.
- The company also quietly beefed up its performance-based cuts earlier this year.
In other news: President Trump said at a campaign rally Monday that he could theoretically call up Exxon’s CEO and ask for a campaign contribution in exchange for political favours.
- “We are aware of the President’s statement regarding a hypothetical call with our CEOâ€¦and just so we’re all clear, it never happened,” the company tweeted shortly after.
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Big deals across the sector
Consolidation is ramping up in the energy industry, reflecting two broad trends:
- Fossil-fuel companies are trying to stay afloat as oil prices slowly recover. And with stocks down, healthy companies can get a bargain-deal.
- Renewable-energy assets look increasingly attractive as the world seeks to decarbonize.
Renewables: Avangrid, a US utility owned by the Spanish energy giant Iberdrola, said it would buy the New Mexican power company PNM Resources for $US4.3 billion. It’s a big deal.
- Combined, the companies have a market value of almost $US20 billion.
Oil and gas: Pioneer Natural Resources said Tuesday it would buy Parsley Energy for $US4.5 billion, forming one of the largest producers in the Permian Basin.
- Meanwhile, the largest US producer of natural gas, EQT Corp, is eyeing a takeover of gas rival CNX Resources, Bloomberg reported Thursday.
- “I think it’s good for the industry,” Chevron’s CFO Pierre Breber said Thursday of consolidation in the oil industry. “There were too many companies in our sector trying to grow too fast with too weak of balance sheets and by consolidating we’re going to end up with stronger financial players.”
More deals to come? Chevron’s Breber thinks so, as do many Wall Street analysts.
- “We are entering a new wave of consolidation for US shale, Goldman Sachs analysts said in a report Thursday.
- “Consolidation will be a key driver of cost restructuring, in our view,” the bank said.
My inbox: Impacts of a Biden victory
High-level takeaways: “Trump offers continuity, with some further easing of regulations on the oil, gas and coal industries,” said Ed Crooks, vice-chair for Americas at the research firm Wood Mackenzie.
- “Biden offers a return to the Obama administration’s strategy of using regulation to cut emissions, and more ambitious moves if the Democrats win control of Congress,” Crooks continued.
If Biden wins but the Senate is under Republican control â€¦
- “Biden’s actions would likely simply seek to reverse Trump’s reversals of Obama-era executive orders and regulations,” BloombergNEF said in a report earlier this month.
- He is likely to ban new leasing on federal lands, but the “impact on onshore production would be negligible,” Crooks said.
- “Most federal acreage in key unconventional oil-producing regions such as the Permian and Bakken has already been leased,” Crooks continued.
- Coal producers would have an even harder time and experience an “accelerated decline in demand,” per a Moody’s note.
If there’s a blue wave â€¦
- “A Senate flip combined with a Biden victory could open the floodgates to climate and clean energy policymaking,” BNEF said.
- Biden would be able to see through his vision of creating a carbon-free grid by 2035, which “would entail one of the most radical infrastructure overhauls in US history,” Crooks said.
- With a Democrat-controlled Senate, he’s also expected to expand federal tax credits for clean energy, among a long list of other agenda items, BNEF said.
- A blue wave could actually increase oil prices, in part by making production more expensive, Goldman Sachs said in a note earlier this month.
Sign up to Insider Energy for more election coverage in the days ahead.
That’s it! Have a great weekend.
Ps. Here’s a pic of my new pup, Jumanji â€” AKA Manji, Juju, Juji, Juju, Mon, Nji. Yes, I’m going to be an annoying dog dad.
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