A bet that turned out to be one of the worst investments in the history of the U.S. With the acquisition, Exxon bet big on the future financial potential of the U.S. To Exxon’s $41 billion acquisition of XTO, a shale gas fracking company. Wanted to get into the shale gas boom driven by fracking. It started a decade ago, when Exxon was producing natural gas but And in December the oil giant made a list of America’s “Zombie” companies - companies that are borrowing more money than they make. But in August, Exxon was dropped from the Dow Industrial Average. It used to be America’s most valuable company. In 2009, the company held the title as the largest gas Of poor investments is taking a particular toll on one major company:ĮxxonMobil. The financial hit the fracking industry has taken from over a decade Harder to build future growth or positive cash flow. Round of bankruptcies will be saddled with huge debts, making it even oilĪnd gas industry is directly linked to the fracking revolution and theĭamage is likely to be permanent - and the companies that survive this oil and gas industry: financial devastation.ĭeloitte released an analysis of the industry finances in mid-2020 and Deloitte Vice President Duane Dickson told CNBC that “a wave of impairments may prompt the deepest consolidation the industry has ever seen over the next six to 12 months.” (Impairments are another way to refer to write-downs of asset values that must be reported as losses by the company.) This is what the fracking revolution has done to the U.S. Of the industry’s remaining fracking assets, and in June, accountingįirm Deloitte estimated the industry could soon write off $300 billion more. This trend continued in the industry in 2020 with historic write-downs In late 2019, before the pandemic hit, Chevron wrote off $11 billion, the majority of which was related to gas fracking assets. Pandemic made things worse, “the sector’s weaknesses extend back Updated the losses to-date to be $300 billion - noting that while the More than two years later the Washington Post ran an article on “Shale’s Bust” and fracking industry, which were around a quarter trillion dollars at the time. This article highlighted the huge losses by the U.S. fracking industry, DeSmog started a series on the finances of the fracking industry with the article, The Secret of the Great American Fracking Bubble. In April 2018, while many were predicting a bright financial future for the U.S. ![]() oil and gas industry - instead it has dealt the industry a major financial blow which has likely sped up the energy transition away from oil and gas towards a lower carbon future. Fracking was supposed to be the future of the U.S. fracking industry has lost over $300 billion. To produce fracked oil and gas was more than what the market was willingĪs a result, the U.S. Theĭifference is that, unlike traditional oil and gas production, the cost Standpoint the industry produced record amounts of oil and gas. The industry made a huge bet on fracking shale deposits to unleash The oil and gas industry has always required huge amounts of money toĮxplore for and produce oil and gas but up until now the industry made While the pandemic has hurt the industry, companies have also benefited from excessive bailouts from pandemic relief programs but these bailouts are a stop gap financial band-aid for the struggling industry. Production for the past decade, peaking in 2019. ![]() This is despite the fracking revolution delivering record oil and gas Oil and gas industry is having to deal with years of losses and fallingĪsset values which has dealt the industry a serious financial blow. After over a decade of the much-hyped U.S.
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