As Crude Fades, Big Oil Must Borrow to Pay Investors
- Supermajors expected to borrow money to maintain buyback pace
- Exxon, Chevron, Shell, TotalEnergies, BP to post lower profits
BP warned of rising net debt levels earlier this month despite already having the highest leverage ratio among its peers.
Photographer: Jason Alden/BloombergWeaker crude prices and refining margins are likely forcing four of the five supermajor oil companies to borrow money to fund $15 billion in share buybacks for the most recent quarter, raising doubts over the payouts’ long-term sustainability.
Exxon Mobil Corp., Chevron Corp., Shell Plc, TotalEnergies SE and BP Plc are expected to post a 12% dip in earnings from last quarter to a combined $24.4 billion when they report results this week, according to the average of analysts’ estimates compiled by Bloomberg. That will leave them all — except Shell — unable to cover their dividends and buybacks with free cash flow, which is expected to be 30% lower than a year ago.