Learn more about Hart Energy Conferences
Get our latest conference schedules, updates and insights straight to your inbox.
S&P Global Ratings on Feb. 11 cut the credit ratings of top U.S. oil producers Exxon Mobil Corp., Chevron Corp. and ConocoPhillips Co. by a notch, citing massive quarterly losses and the pressure to tackle climate change.
The ratings slipped to ‘AA-,’ weeks after the agency warned it was considering downgrades for 13 of the world's largest oil companies due to the rising risk from energy transition and volatile commodity prices.
Several oil companies posted billions of dollars in losses in 2020 after the COVID-19 pandemic brought global travel to a standstill, slashing fuel demand and sending crude prices to historic lows.
The sector is also under pressure from investors and pension funds demanding companies to disclose their carbon footprint and reduce greenhouse gas emissions by investing in renewable energy projects.
While companies including Exxon Mobil, Chevron and ConocoPhillips have announced steps to tackle climate change, S&P said it does not see those “providing material credit differentiation.”
Investors are also pressuring the companies to cut spending and focus on dividends and buybacks after the sector amassed massive debts to grow during shale oil’s golden era.
S&P has a ‘stable’ outlook on Chevron, widely considered to have the best restraint on spending. Exxon Mobil’s outlook is negative, meaning the ratings agency could downgrade its profile again.
Exxon Mobil last year slashed spending on new projects by nearly a third and outlined plans to cut up to 15% of its workforce, but its debt rose by $21 billion due to expenses and restructuring.
S&P expects Exxon Mobil to take more actions such as selling assets or further cutting its spending budget to manage its debt.
Recommended Reading
Help Wanted (Badly): Attracting Workers to Energy is Becoming Difficult
2024-03-27 - Attracting workers to the energy industry is becoming a difficult job, despite forecasted growth in the industry.
Stena Evolution Upgrade Planned for Sparta Ops
2024-03-27 - The seventh-gen drillship will be upgraded with a 20,000-psi equipment package starting in 2026.
Petrobras to Step Up Exploration with $7.5B in Capex, CEO Says
2024-03-26 - Petrobras CEO Jean Paul Prates said the company is considering exploration opportunities from the Equatorial margin of South America to West Africa.
E&P Highlights: March 25, 2024
2024-03-25 - Here’s a roundup of the latest E&P headlines, including a FEED planned for Venus and new contract awards.
TotalEnergies Restarts Gas Production at Tyra Hub in Danish North Sea
2024-03-22 - TotalEnergies said the Tyra hub will produce 5.7 MMcm of gas and 22,000 bbl/d of condensate.