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After a grim Q2 season for Big Oil, the world’s third-most valuable energy company is warning that 20% of the world’s oil and gas reserves may no longer be viable, according to Bloomberg.
According to Exxon Mobil, one-fifth of the world’s oil and gas reserves will no longer qualify as “proved reserves” at the end of this year if oil prices fail to recover before then.
A flurry of oil and gas companies have written off billions in oil and gas assets as the value of those assets in the current oil price climate is no longer what it once used to be. Exxon was not among them.
Exxon is currently reviewing its oil and gas assets, the results of which should be available by November.
But Exxon has caught some flack for not making many asset adjustments over the last decade, while its Big Oil peers have.
Exxon recorded its worst quarterly loss in modern history in the second quarter of this year, booking a loss of $1.1 billion, compared to earnings of $3.1 billion in Q2 2019.
Still, Exxon is not moving to cut its dividend, which analysts expect will cost the oil major $15 billion. It is, however, moving to make some job cuts, pension matching contribution cuts, and other cost discipline issues, according to various sources.
A large portion of Exxon’s shareholders are retail investors, Exxon continues to make their dividend a priority.
Exxon has been demoted from the world’s second-most valuable energy company last month, as Reliance Industries unseated the supermajor from its long-held position.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.
But if you can produce hydrogen cheaply enough from solar power, it can replace oil in most applications because electric motors can run anything which piston engines now do.
And with enough electricity, you can probably manufacture an oil substitute for jet aircraft. And worse case, people still lived just fine before the invention of the Boeing 707 and 747. Flight is nice, but it is not essential for survival, like energy is. You could still travel cross country on fast electric trains, like the Japanese and Europeans do. You could cross oceans on passenger liners, like people did until the jet age dawned.
What governments could have done, was to mandate that electric cars have battery packs that could be swapped out at service stations using standardization, and automation. Drive in, and a machine swaps you out for a fully charged battery, and you are on your way in 5 minutes, just like a gasoline car. But that will probably never happen. Batteries will become a recycling and resource utilization problem. So with affordable hydrogen, fuel cells would probably be the way to go, if you could afford the hydrogen and infrastructure.
actually covid19 purpose is to bring in recession and write off such fake assets -shale oil.
Try to visualise -money looted by way of stock market crash, write off -and all thanks to cvoid19.
these guys will now face vodi19 in HELL