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EXXON DOWNSIZES GLOBAL EMPIRE, FEARS ON DIVIDENDS SIMMER

Ill-timed bets on rising demand have Exxon Mobil Corp. facing a shortfall of about $48 billion through 2021, according to a Reuters tally and Wall Street estimates, a situation that will require the top US oil company to make deep cuts to its staff and projects, Jennifer Hiller wrote for Reuters late on September 8, 2020.

Wall Street investors are even starting to worry about the once-sacrosanct dividend at Exxon, which in the 20th Century became the world’s most valuable company using global scale, relentless expansion and strict financial controls.


Exxon weathered a series of setbacks last decade and under Chief Executive Darren Woods sought to return to past prominence by big bets on US shale oilfields, pipelines and global refining and plastics. It also bet big on offshore Guyana, where it discovered up to 8 billion barrels of oil, six years of production at its current rate.


But Exxon’s ability to finance that global expansion is no longer assured. This year the company borrowed $23 billion to pay its bills, nearly doubling its outstanding debt. In July, it posted its first back-to-back quarterly losses ever. It faces a full-year $1.86 billion loss, according to Refinitiv, excluding asset sales or write downs. The looming shortfall of about $48 billion through 2021 was calculated using cash from operations, commitments to shareholder payouts and costs for the massive expansion program Exxon had planned. Now the company is embarking on a worldwide review of where it can cut expenses, and analysts believe the once unthinkable dividend cut has grown more likely.



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