Big Oil Braces for Impact as Pace of Buybacks Becomes Untenable
– Oil majors are confronted with a difficult dilemma as the investor community is anticipating Q3 2024 results, as most would find it very hard to replicate last year’s performance when they’ve paid more than $272 billion in dividends and share repurchases.
– Share buybacks would need to be downscaled as Chevron, ExxonMobil, and TotalEnergies would need to borrow $5-8 billion each to maintain the current pace of buybacks, with ENI most probably offsetting some of that pressure by asset sales.
– BP stands out amongst oil majors as it already has the highest debt ratio with $22.6 billion of net debt against a capitalization of $85 billion, making it highly unlikely that it can fulfill its $14 billion buyback program through 2025.
– US major ExxonMobil has already flagged that the drop in oil prices in August-September reduced its upstream revenues by $600 million to $1 billion, aggravated by hurricane damage and weakening refining margins.
Europe’s Supply Options Widen as Libya Lifts Oil Embargo
– Libya’s eastern government, headquartered in Benghazi, announced it had lifted force majeure on all oil fields, ports, and infrastructure starting from October 3, allowing for a nationwide resumption in oil output and exports.