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British & US Oil Bet on Different Futures

Tall Pour: 30 Nov 2023

British oil giant Shell reported Q3 earnings of $6.2bn, the highest this year, but down 34% from Q3 last year. Like Shell, BP is also under pressure from the UK government for a green transition that US oil majors are starting to ignore to double down on projects in Guyana, that are expected to produce about 1mm barrels per day 2028. Both British producers are under pressure to affect a green transition, returns on which that Shell bossWael Sawan hoped “would have come sooner.”

Both companies claim to not be interested in the mega-mergers of Chevron and ExxonMobil, and are dubious about the long-term demand for fossil fuels. Shareholders appear dubious about their green efforts. They may be onto something.

Heads: British Prime Minister Rishi Sunak appears to be walking back on the UK’s wildly unpopular and unprofitable green initiatives, so the Shell and BP just might make an enormous pivot in their portfolios.

Tails: The conservatives just may well get their clock cleaned in the next election.

Regardless of the stance in Whitehall, the smart bet is that the green transition will be longer and slower than those random benchmarks would have you believe.


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