Why is an American oil giant drilling as a response to climate change to even more Oil

Mike Wirth has just a hard Job. In times where Oil and Gas are the world is less and less in demand, he has to pass a giant in this business. "We will find way

Why is an American oil giant drilling as a response to climate change to even more Oil

Mike Wirth has just a hard Job. In times where Oil and Gas are the world is less and less in demand, he has to pass a giant in this business. "We will find ways to make Oil and Gas more efficient and environmentally friendly," announced the CEO of Chevron as a self-confident a month ago, on a virtual conference of the industry Association in Texas. Chevron 76,30 EUR +0,23 (+0,30%) trade gate To the course data His words are likely to arrive in a U.S. state that lives for more than 100 years, from the Black Gold. It is only in the past decade, Texas has experienced a Renaissance. The under the desert floor discovered in the Permian basin is basin the second largest Oil reserve in the world after the Saudi Ghawar -. In today's production of four million barrels of Oil a day, the stocks were sufficient for about 32 years and billions in profits promise. With Stock Selection in Europe, you will be able to achieve excess Returns with the System. You put on the strongest trend signals from Germany and Europe. Long and Short. So make your investment a success, regardless of the DAX level. (Partner quote) Here is an exclusive free trial!

the price of Oil even before Corona pandemic under pressure

that's Why Wirth makes his words into action: A day earlier, he had given the green light for Chevron will buy out the competitors of Nobel Energy for approximately five billion dollars. It is the largest acquisition since the 59-Year-old, the management of the group three years ago took over. Since then, he has rebuilt Chevron. Instead of big Oil, he continues today on a smaller Fracking sites. Promote the Texas Oil although more expensive to light than conventional funding, but they are faster ready-to-use and deliver profits even faster.

That was true at least in the past few years, as the ever-growing hunger for energy in the world, the Fracking production in the US, so the drive that the country, even Russia and Saudi-obsolete Arabia as the largest oil Producer in the world. And there was good money to earn. From a price collapse in 2016 apart, holding the price for the US variety of West Texas Intermediate (WTI) for 2015 be resistant to over 50 dollars per Barrel. Still in January 2020 climbed to 62 dollars.

demand for Oil drops, shares

because the problems hinted at. Since last year, OPEC, the US does not belong to can keep the global price of Oil only by funding cuts, artificially high. As Russia refused in January of this procedure, broke the prices. And than a month later, the Corona-pandemic moved across the world and all the countries, their economies down went, it was with the Hunger for Oil and Gas well and truly over. At the height of the WTI price fell at 20. April even into the Negative.

Even without the shock of the pandemic, the demand for Oil and Gas is expected to decline in the coming years. In industrial countries, but also in China, the largest importer of Oil, has used a rethink. Under the impression of climate change, renewable energies are gaining in importance. Oil and Gas are the losers.

This also shows in the stock exchange From of 2014 until the end of 2019, the shares fell by the largest Oil companies in the world, with the exception of the French Total group, while the stock exchanges have increased considerably overall, the S&P 500, for example, 77 per cent.

Other groups want Co2-neutral

work According to competitors change their strategy, BP announced a week ago, to reduce its Oil and gas production until 2030 by 40 percent and to rely more on climate-friendly energy carrier. Shell bought since 2016 in the Solar and electric car companies and invested per year, up to three billion dollars in renewable energies, although this is only one-tenth of the total consolidated budget. The French company Total wants to increase its spending in this area on 20 percent of the budget. By 2050 all of the major European corporations Co2 to work-neutral, as agreed in the Paris climate protection agreement.

The Chevron refuses. Officially, the group does not support the agreement, a specific Plan to adhere to the agreements, but there are. "Our shareholders, we have the obligation to invest in things where we are and bring us good profits," says Wirth. His group is harmed by the own history. 20 years ago, Chevron has invested heavily in geothermal energy – it was a financial Disaster. With the stock recommendations of the Bernecker exchange-compass, you can get more out of your money! (Partner activity) 30 days free to try!

Chevron fails on its own claims

"All of our Investments are in line with our long-term financial priorities," explains the CEO, stressed: "first and foremost, the dividend is!" The words are not to arrive at climate-conscious consumers. However, experts estimate that Oil and Gas will play in developing countries even up to 50 years the most important role. Chevron could still earn good money.

In theory, wants to make the group promoting at least cheaper, cleaner and emission-free, but his margins. In practice, Chevron fails but already now it. Last year, the management Board must report that a 45-billion-Dollar project in Kazakhstan to 25 percent more expensive than planned. Self-promotion in the Permian basin had to restrain Wirth. In 2019, the earnings per share fell to 80 percent compared to the previous year, this year is likely to end up with a two billion Dollar loss.

The risk in Chevrons strategy is to lose the connection to a fundamental industry change. A destiny, what had to learn other giants such as Nokia in the Tech sector. Wirth does not see this danger. He used this most recently in Texas, a crude comparison: In the 19th century. Century had whales been your Oil due to being chased, before companies like his Oil out of the earth promoted. "In fact, our industry has saved the whales from extinction," he says proudly. And "Save the whales" was a Synonym for environmental protection.

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Updated Date: 14 August 2020, 12:27

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