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City investors deserting oil giants

City investors deserting oil giants 

Fund titans blacklist BP over green shift: Fidelity among City investors deserting oil giants – as clean energy plans fuel profit fears

  • BP and Shell are undergoing the biggest restructurings in their histories, shedding a total of 19,000 jobs globally 
  • Both have committed to cutting the carbon footprint of the oil and gas they produce to net zero by 2050

EXTRACTS:

BP and Shell are undergoing the biggest restructurings in their histories, shedding a total of 19,000 jobs globally. Both have committed to cutting the carbon footprint of the oil and gas they produce to net zero by 2050.

BP chief executive Bernard Looney said in August that his company is shifting to a low-carbon business because ‘the energy mix is changing’, with greater demand from customers for cleaner fuels. The pandemic has made the shift more urgent as global oil prices and demand have collapsed further.

Last week, Shell wooed investors by announcing a ‘new era of dividend growth’, starting with a modest 4 per cent rise to 16.65 cents per share which, chief executive Ben van Beurden said, made it ‘a compelling investment case’. BP has fixed its dividend at half of its pre-crisis levels, but last week said it could start returning surplus cash to shareholders through share buybacks from the end of 2021 once it has reduced net debt from $40.4billion to $35billion.

It said it generated more cash than it needed over the three months to September to cover its dividend and its investments.

After pressure from a group of investors led by Sarasin & Partners last year, BP, Total and Shell cut their long-term price assumptions for oil and gas, and BP wrote down the value of its assets by up to $17.5billion in August. Investor groups say other energy, utilities and transport firms may be forced to announce major write-offs after factoring in climate risks.

FULL ARTICLE

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