Oil industry

IEEFA Research

IEEFA report: Effects of long-running oil-purchase scandal undermine privatization and contract-reform initiatives at PREPA

IEEFA report: Effects of long-running oil-purchase scandal undermine privatization and contract-reform initiatives at PREPA

A scheme that contributed to utility’s ruin and a pattern of whistleblower suppression; Potential new grounds for bondholder claims in bankruptcy proceeding; ‘History is repeating itself in Puerto Rico’

July 18, 2018, SAN JUAN (IEEFA) — A long-running practice in which Puerto Rico’s public utility bought low-quality oil at high-quality prices has been mostly ignored in Gov. Ricardo Rosselló’s privatization of the Puerto Rico Electric Power Authority (PREPA). A report published today by the Institute for Energy Economics and Financial Analysis (IEEFA) — “Multibillion-Dollar Oil […]

IEEFA report: Fund trustees face growing fiduciary pressure to divest from fossil fuels

Oil, gas, and coal industries are seen as ‘increasingly speculative;’ Sector will continue to be weighed down by lackluster rewards and daunting risks; A ‘proper financial response’ is due

July 10, 2018 (IEEFA) — A paper published today by the Institute for Energy Economics and Financial Analysis details the growing rationale for divesting from the fossil fuel industry. The paper—“The Financial Case for Fossil Fuel Divestment”—is aimed primarily at trustees of investment funds that continue to hold stakes in a sector that is freighted […]

IEEFA report: ‘Canada’s Folly’ could drive national budget deficit 36% higher while ensuring Houston-based Kinder Morgan a 637% gain

IEEFA report: ‘Canada’s Folly’ could drive national budget deficit 36% higher while ensuring Houston-based Kinder Morgan a 637% gain

Purchase of stalled Trans Mountain Pipeline would benefit Texas company at expense of taxpayers; Call for full public disclosure; C$11.6 billion in completion costs for ‘a pipeline project that is unnecessary’

June 26, 2018  (IEEFA)— Canada could see its budget deficit grow by more than a third with the national government’s purchase of the Trans Mountain Pipeline from Houston-based Kinder Morgan, according to a report published today by the Institute for Energy Economics and Financial Analysis. The report —“Canada’s Folly: Government Purchase of Trans Mountain Pipeline Risks […]

IEEFA Investor Memo ExxonMobil (XOM): Company Is an ‘Outlier’ in How It Reports Write-offs on Canadian Oil Sands Assets

Loss Accounting ‘Largely Overlooked by Industry Analysts;’ Full Transparency Could Affect Balance Sheet by $22 Billion

April 17, 2017  (IEEFA.org) – The Institute for Energy Economics and Financial Analysis (IEEFA) today published an investor memo questioning whether ExxonMobil has appropriately accounted for its recent write-off of billions of barrels of Canadian oil sands assets. In “ExxonMobil Investment Note,” IEEFA outlines how ExxonMobil remains the exception in the oil industry in its […]

April 17, 2017 Read More →
IEEFA Analysis: The Economic Frailties and Rickety Finances Behind the Dakota Access Pipeline

IEEFA Analysis: The Economic Frailties and Rickety Finances Behind the Dakota Access Pipeline

Shippers Are in a Position Now to Renegotiate Contracts; Oil Prices Have Tanked Since Deals Were Signed; Long-Term Outlook for Project is Deeply Uncertain

Construction of the Dakota Access Pipeline has sparked considerable public controversy, bringing national attention to issues that include tribal sovereignty and risks to drinking water. Less publicized are the project’s financial weaknesses, and the fact the pipeline may represent a substantial overbuilding of the Bakken’s oil-transport infrastructure. The report that we released today in partnership […]

November 16, 2016 Read More →
IEEFA Report: Red Flags on ExxonMobil: Core Financials Show a Company in Decline

IEEFA Report: Red Flags on ExxonMobil: Core Financials Show a Company in Decline

Potentially Irreversible Slide; Falling Revenues, Rising Debt, Shrinking Capex, Weak Cash Balances Add to Growing Reputational Risk Tied to Climate-Change Controversy; ; Institutional Investors Owe Their Shareholders a Fiduciary Review

CLEVELAND, Oct. 26, 2016 (IEEFA.org) — The Institute for Energy Economics and Financial Analysis (IEEFA) published a report today that indicates deep financial weaknesses at ExxonMobil (XOM) and suggests the company is in potentially irreversible decline. The report—“Red Flags on ExxonMobil (XOM)”—by IEEFA Director of Finance Tom Sanzillo, cites key metrics that include a 45 […]

October 26, 2016 Read More →
Comments on Proposed Consolidated Federal Oil and Gas and Federal and Indian Coal Valuation Reform, ONRR-2012-0004-0024

Comments on Proposed Consolidated Federal Oil and Gas and Federal and Indian Coal Valuation Reform, ONRR-2012-0004-0024

COAL SOLD FOR EXPORT SHOULD NOT BE EXEMPT FROM FEDERAL ROYALTY PAYMENTS

Comments on Proposed Consolidated Federal Oil and Gas and Federal and Indian Coal Valuation Reform, ONRR-2012-0004-0024 By Tom Sanzillo, Director of Finance, Institute for Energy Economics and Financial Analysis

May 7, 2015 Read More →

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IEEFA Update: Oil and gas industry caught in a capex conundrum

Invest in the future or return cash to shareholders?

The oil and gas industry confronts a host of challenges that would have been inconceivable a decade ago: weak cash flows, meager profits, slumping stock values, volatile revenues, unreliable demand growth, and rising competition from renewables, to name just a few. The industry now faces a quandary. Should companies continue to invest in new drilling […]

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IEEFA update: In Exxon lawsuit, another indication of growing oil-industry peril

Risks outweigh potential rewards; Fossil fuel stocks grow increasingly speculative

The lawsuit filed yesterday by New York’s attorney general against Exxon Mobil is a stark indication of just how risky investing in oil and gas companies has become. The lawsuit asserts that the company defrauded shareholders by downplaying the business risk of climate change, and litigation poses obvious financial risk. It may even expose ExxonMobil—and […]

and October 25, 2018 Read More →

Investors push for consolidation in shale oil and gas sector

Wall Street Journal ($): A private-equity firm is urging oil producer Resolute Energy Corp. to merge with a rival, the latest salvo in a growing campaign by some investors to force shale drillers to consolidate. Kimmeridge Energy Management Co. told Resolute’s board of directors in a letter Friday that it was stepping up call for […]

October 22, 2018 Read More →
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IEEFA U.S.: More red flags on fracking-focused companies

As earnings season begins, a worrisome trend persists

The U.S. fracking sector continued to spill alarming volumes of red ink in the first half of 2018. We detail the trend in a research brief published jointly today by IEEFA and Sightline Institute that describes how fracking companies continue to struggle.  Even after two and a half years of rising oil prices and growing expectations […]

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IEEFA update: Whether prices are high or low, the oil and gas industry is freighted with risk

As technology advances, fossil fuels are expensive at any price

Over the past few years, the rationale for investment in fossil fuels has changed from being one supported by blue-chip, long-term value into a more speculative, volatile proposition driven by quarterly dividends. As a result, the direction of oil prices is increasingly relevant, having become the lens through which investment is assessed, and revenue and […]

IEEFA op-ed: Colorado’s pension fund shouldn’t bank on the future of oil and gas

Past performance is no guarantee of future success

By adopting a fossil-free portfolio strategy as has been urged, the Public Employees Retirement Association of Colorado would be doing right by its 560,000 members, ensuring steadier investment returns as the oil and gas industry faces continued uncertainty and decline. In a paper commissioned by the Independent Petroleum Association of America, an anti-divestment consultant and […]

September 18, 2018 Read More →
IEEFA update: Six real-world rebuttals to divestment naysayers
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IEEFA update: Six real-world rebuttals to divestment naysayers

A tendency among academics to overlook the burgeoning risk in fossil fuel holdings

Academic arguments against divesting from the oil and gas sector are just that—academic—and those who make them ignore the underperformance of the sector and the array of mounting risks it faces. The principal objections of divestment detractors—that divestment will either cause institutional investment funds to lose money or undermine their ability to meet their objectives—are […]

and September 12, 2018 Read More →
IEEFA update: Divestment 101
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IEEFA update: Divestment 101

A 10-point FAQ primer on a new mindset around energy sector holdings

The fast-moving evolution of the energy sector is changing investor minds and altering capital market flows. This shift raises as many questions about where things are going as it does about the status quo. A report we published earlier this summer—“The Financial Case for Fossil Fuel Divestment”—takes a stab at addressing the topic practically and […]

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IEEFA update: The investment rationale for fossil fuels falls apart

An outdated mindset that no longer lives up to its hype

For decades, the fossil fuel sector literally fuelled the global economy and powered the world’s investment markets. This is no longer the case. The long-standing and now outdated investment thesis around fossil fuels—that such holdings would make large and reliable annual contributions to institutional funds—has crumbled. The sector now lags the broader market, and the […]

‘What made Exxon special is fading’

Wall Street Journal: For decades it was the very model of a modern supermajor, but Exxon Mobil ’s edge over the rest of Big Oil is slipping and probably will continue to do so. In the past year, for example, Exxon’s shares have trailed those of each of its global peers—Shell, BP, Chevron and Total […]

July 30, 2018 Read More →