It’s getting harder to keep the ‘Big’ in Big Oil

    A dozen years ago, ExxonMobil was the bluest of blue-chip companies, but the oil giant’s market value today is about one-third of what it was in 2008.

    But it’s not just ExxonMobil, The Washington Post reports. Today, oil and gas companies constitute just 2.3% of the S&P 500, down from more than 15% in 2008. Similarly, oil and gas accounted for only about 4.2% of the European stock market at the end of July.

    The slide has been so steep that today five technology firms—Alphabet, Amazon, Apple, Facebook and Microsoft—are each worth more than the top 76 energy companies combined. The Dow dropped ExxonMobil to replace it with yet another tech darling, the cloud computing company Salesforce. 

    ExxonMobil and a half-dozen or so of the world’s largest oil companies—so-called Big Oil, though that’s an increasingly outdated term—just aren’t that big anymore.  

    During what are normally busy driving months of April, May and June, BP lost $16.8 billion, Exxon netted $1.1 billion in losses and Chevron—the Dow’s last remaining oil firm—shed $8.3 billion.

    The supermajors that were able to turn a profit were still off the mark from the previous year. Total and Royal Dutch Shell saw a second-quarter profit of $126 million and $638 million, respectively—a more than 80% decline from 2019 for each.   

    Big oil companies are borrowing money and selling assets to maintain dividends prized by investors, though those payouts create an unsustainable cash flow. According to the Institute for Energy Economics and Financial Analysis, those five oil majors spent $16.9 billion more on dividends and stock buybacks than they generated. Read the full story.