Conoco-Shell deal shows division between US and EU oil
European and American oil companies have very different approaches to the future of energy.
Royal Dutch Shell
(RDS.B) in the Permian Basin for $ 9.5 billion in cash.
Conoco obtains approximately 225,000 acres and produces properties in Texas and more than 600 miles of pipelines and operated infrastructure for crude oil, gas and water.
“We have had a unique opportunity to add superior quality assets at value that meets our strict cost of supply framework and brings financial and operational metrics that are highly accretive to our multi-year plan,” said Ryan Lance, CEO of Conoco, in a statement. declaration.
Conoco shares were up 1.6% in pre-market trading on Tuesday after falling less than 1% after office hours on Monday, while Shell shares were up 4.7%. Conoco also announced that it is increasing its quarterly dividend by 7%, to 46 cents per share, which represents a current dividend yield of 3%.
So even as Europe shrinks its presence in the United States and elsewhere, American companies continue to enjoy considerable room for growth. Another recent example is
(LPI), which announced on Sunday that it had agreed to buy more acreage in Texas.
The American and European oil majors are under pressure to orient their activities towards low-carbon alternatives. But European companies are making a much faster transition, ditching their fossil fuel assets and betting big on renewables. A Dutch court told Shell earlier this year that it needed to cut emissions from its products faster than it originally planned.
In the United States, oil and gas companies have started talking more about climate change and some are investing in new technologies.
(CLC), for example, last week announced plans to invest $ 10 billion in areas such as renewable fuels by 2028. But most of the big oil companies aren’t considering the kinds of major changes that occur across the Atlantic. In the United States, oil investors will continue to have primary exposure to oil. In Europe, companies like
(TTE) and Shell are becoming players in the energy transition – a way to buy solar and wind energy while making less and less money from fossil fuels.
Truist analyst Neal Dingmann had mentioned in a report Monday that Shell could sell its stake in the Permian and that Conoco could be a company looking to strike deals. Other companies he mentioned included Devon Energy (DVN), Earthstone Energy (ESTE), Marathon Oil (MRO), Northern Oil & Gas (NOG), SilverBow Resources (SBOW), Southwestern Energy (SWN) and Whiting Petroleum (WLL).
Write to Avi Salzman at [email protected]