Exxon Mobil's Algae Biofuels Program Faces Scrutiny
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5 days ago
0mins
Should l Buy XOM?
Source: seekingalpha
- Program Underperformance: In early 2020, Exxon Mobil (XOM) scientists reported that the $500 million algae biofuels initiative was falling short of its goals, highlighting significant challenges and limitations in the company's renewable energy efforts.
- Misleading Investor Communication: Despite scientists' concerns about algae's low productivity, Exxon continued to promote it to investors as a more promising biofuel source than sugarcane and palm oil, potentially undermining investor confidence due to the inconsistency of information.
- Frequent Internal Communications: The exchange of communications between the investor relations team and researchers regarding how to present the algae project's low productivity to investors reflects the company's struggle between scientific realities and market promotion.
- Termination Statement: An Exxon spokesperson stated that the program was ended when it became clear the technology would not scale commercially, asserting that any suggestion of success is a lie, which may negatively impact the company's future renewable energy investment strategy.
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Analyst Views on XOM
Wall Street analysts forecast XOM stock price to fall
19 Analyst Rating
12 Buy
7 Hold
0 Sell
Moderate Buy
Current: 160.780
Low
114.00
Averages
132.17
High
158.00
Current: 160.780
Low
114.00
Averages
132.17
High
158.00
About XOM
Exxon Mobil Corporation is an energy provider and chemical manufacturer. The Company’s principal business involves exploration for, and production of, crude oil and natural gas; the manufacture, trade, transport and sale of crude oil, natural gas, petroleum products, petrochemicals and a wide variety of specialty products; and pursuit of lower-emission and other new business opportunities, including carbon capture and storage, hydrogen, lower-emission fuels, Proxxima systems, carbon materials, and lithium. Its Upstream segment explores for and produces crude oil and natural gas. The Energy Products, Chemical Products, and Specialty Products segments manufacture and sell petroleum products and petrochemicals. Energy Products segment includes fuels, aromatics, and catalysts and licensing. Chemical Products segment consists of olefins, polyolefins, and intermediates. Specialty Products segment includes finished lubricants, basestocks and waxes, synthetics, and elastomers and resins.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Supply Constraints: Iran's attacks on energy infrastructure have effectively closed the Strait of Hormuz, choking off 20% of global oil and LNG supplies, which is expected to further elevate oil prices and enhance Exxon's profitability.
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- LNG Project Milestone: Exxon and QatarEnergy completed the first LNG train at their Golden Pass project in Texas, with an initial capacity of 6 million tonnes per annum, set to ramp up to 18 million tonnes, coinciding with disruptions in Qatar's LNG operations due to the Iran conflict, making the project's timing critical.
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- Military Engagement: Iran continues to strike economic and infrastructure targets in neighboring Gulf Arab countries and shot down an American F-15E fighter jet over the weekend, with Trump confirming that the missing service member has been rescued, further escalating tensions.
- Federal Reserve Nomination: Trump's nominee Kevin Warsh is set for a Senate Banking Committee hearing on April 16, despite a separate criminal probe into the Fed, indicating a complex economic policy landscape under the Trump administration.
See More
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- Oil Price Fluctuations: U.S. West Texas Intermediate prices increased by 2.57% to $114.11 per barrel, while the international benchmark Brent crude rose by 2.62%, reflecting market concerns about the Middle East conflict and its potential impact on global supply.
- Trump's Threats: President Trump issued threats to attack Iran's power plants and civilian infrastructure starting Tuesday if Tehran fails to fully reopen the Strait of Hormuz, a move that could escalate regional tensions.
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- Trump's Threat: President Trump threatened Iran via social media, demanding the opening of the Strait of Hormuz by Tuesday or face attacks on its power plants, which has heightened market uncertainty.
- Supply Disruption Impact: The closure of the Strait is expected to result in nearly 1 billion barrels of oil lost by the end of the month, including 600 million barrels of crude and 350 million barrels of refined products, marking the largest oil supply disruption in history.
- OPEC+ Production Increase: The eight members of OPEC+ agreed to increase production by 206,000 barrels per day in May, but uncertainties remain regarding how this oil will reach global markets while the Strait remains closed.
See More
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See More
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- Supply Disruption Impact: The ongoing Iran conflict has removed an estimated 12 to 15 million barrels per day from the market, accounting for roughly 15% of global supply, marking the largest supply disruption in recorded history, even as crude prices soar to nearly $120 per barrel.
- Price Forecast Warning: JPMorgan cautioned that if the
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