Exxon no longer largest U.S. oil company

Source: By Mike Lee, E&E News reporter • Posted: Thursday, October 8, 2020

Chevron Corp. overtook Exxon Mobil Corp. yesterday as the biggest U.S. oil company, adding to a year of turmoil for both Exxon and the broader oil industry.

Chevron’s market capitalization — the value of all its outstanding shares — stood at over $142 billion at the close of trading yesterday, while Exxon’s slipped to $141.6 billion.

The change could be fleeting, but it’s the latest in a string of negative financial news for Exxon. The company, which was the largest U.S. corporation just seven years ago, was removed from the Dow Jones Industrial Average in August (Energywire, Aug. 25).

Last week, the Florida-based utility and electricity provider NextEra Energy Inc. became the biggest energy company when its market cap exceeded Exxon’s (Energywire, Oct. 5).

Chevron and the rest of the oil industry have racked up huge losses since the start of the pandemic. Chevron lost $8.3 billion in the second quarter of this year, and its share price has fallen 38% since the end of 2019.

Exxon has fallen further and faster. Its share price is down 52% since the end of 2019, and it warned last week that it could post more losses in the third quarter.

Unlike other supermajor oil companies, Exxon hasn’t cut the dividend it pays to stockholders, and it is betting on being able to expand its oil production, despite the drop in oil consumption caused by the pandemic and even though that will mean increasing its greenhouse gas emissions (Climatewire, Oct. 6).

The investment bank Goldman Sachs Group Inc. rates Exxon as a “sell” and said its refining segment, which has historically been a strength, hasn’t helped it survive the downturn, and it could wind up drawing on its cash reserves or selling assets to cover the dividend. Meanwhile, European and Canadian oil companies “both offer a significantly stronger free cash flow on average,” Goldman Sachs analysts said in a note.