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    BP.   GB0007980591

BP PLC

(BP.)
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Delayed Quote. Delayed London Stock Exchange - 01/21 11:38:53 am
381.75 GBX   -1.90%
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ExxonMobil's governance structure fails the energy transition - Engine No. 1

12/02/2021 | 10:46am EST
The logo of Exxon Mobil Corporation is shown on a monitor above the floor of the New York Stock Exchange in New York

LONDON (Reuters) - A failing governance structure propagated by a management without a strategy for the energy transition was behind Engine No. 1's quest to bring independence to ExxonMobil's board, Chris James, founder of the U.S. hedge fund told Reuters.

Governments, companies and individuals are taking steps to cut their carbon footprints and enable the energy transition which includes electric vehicles and renewable energy such as wind turbines and solar.

ExxonMobil has been an outlier in transparency and accountability in its environmental impact, James said in an interview at the Reuters Next Conference.

"This is a company that has lost its social licence ... It needs to look at the energy transition as an opportunity to be part of the solution instead of the problem."

Three of four people with energy transition experience nominated by Engine No. 1 joined ExxonMobil's board earlier this year.

Oil majors such as BP facing mounting pressure from regulators and investors have moved to develop cleaner energy and divest from fossil fuels, a primary source of greenhouse-gas emissions that cause global warming.

ExxonMobil has instead invested in new projects in the oil and gas arena that should not have been approved and wasted capital, James said, adding that the company had some of the most talented engineers in the world.

"Management has prevented these engineers from unleashing the power they have to create value in the energy transition," James said, adding that ExxonMobil had outperformed Chevron since Engine No. 1's intervention.

ExxonMobil's shares are up around 60% since November 2020 when Engine No. 1 bought them compared with roughly 30% for Chevron.

In response to a request for comment ExxonMobil said: "We evaluate our investments across a range of scenarios - including net-zero pathways - and we look forward to sharing more details in the coming months."

"There is significant growth potential in the low-carbon opportunities where we can leverage our competencies in technology, engineering, and project development," Exxon's emailed response said. "This gives ExxonMobil an advantaged position irrespective of the pace of the energy transition."

PLUG-IN HYBRIDS

Linking sustainability with profitability is a theme that runs through Engine No. 1's portfolio, James said, which is why the hedge fund took a stake in General Motors, where the board is fully behind management's plans.

Battery powered electric vehicles, create an opportunity for General Motors to win an enormous share of the market this decade, James said.

"Japanese automakers have made a bet that plug-in hybrid electric vehicles are the future, not battery electric vehicles, and we believe that is a mistake by the Japanese automakers and an opportunity for GM and Ford," he said.

"During my lifetime, GM haven't had the opportunity to gain as much share as they will have in the next 10 years."

To watch the Reuters  Next conference please register at https://reutersevents.com/events/next/

(Reporting by Pratima Desai; Editing by David Evans)

By Pratima Desai


ę Reuters 2021
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Financials (USD)
Sales 2021 160 B - -
Net income 2021 9 345 M - -
Net Debt 2021 38 012 M - -
P/E ratio 2021 11,1x
Yield 2021 4,17%
Capitalization 102 B 102 B -
EV / Sales 2021 0,87x
EV / Sales 2022 0,70x
Nbr of Employees 63 600
Free-Float -
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Technical analysis trends BP PLC
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Mean consensus OUTPERFORM
Number of Analysts 24
Last Close Price 5,18 $
Average target price 5,76 $
Spread / Average Target 11,1%
EPS Revisions
Managers and Directors
Bernard Looney Chief Executive Officer & Director
Murray Auchincloss Chief Financial Officer & Director
Helge Lund Chairman
Gordon Young Birrell Executive Vice President-Production & Operations
Paula Rosput Reynolds Senior Independent Director
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