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Exxon’s board shakeup could force review of billions of dollars in spending

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The recent overhaul of Exxon Mobil Corp‘s board of directors could shift billions of dollars in spending and strategy over several years, but any changes likely will take time, analysts and investors say.

A quarter of directors last month lost their seats to outsiders, and the March appointment of activist Jeff Ubben puts a third of the 12-member board in new and more cost-conscious hands. Investors who rejected Exxon’s view of a slow transition to lower-carbon fuels also want spending to be revisited, they said.

The Exxon boardroom contest shocked the energy industry and came after years of weak financial returns at the largest U.S. oil producer. Shares are up by about 50% this year as oil prices have recovered from pandemic lows.

Exxon’s board has been a prestige post for former CEOs, typically without any energy experience. Critics said the practice led Exxon to miss industry shifts and play catch-up at the expense of its balance sheet. Exxon bought in to natural gas near its peak, leading it to reduce the value of properties in the United States, Canada and Argentina by more than $19 billion last year, and paid up to arrive late to the shale oil party.

New directors with energy experience likely will address Exxon’s spending “far more vigorously,” said Anne Simpson, investment director at shareholder California Public Employees’ Retirement System.

Investors want a “fundamental rethink on strategy,” she said, with “the big measure” being its $16 billion-$19 billion annual project spending. The shakeup puts in play billions of dollars in shale, liquefied natural gas, refining and chemical projects.

Asked to comment on its new board and strategy, Exxon said only that it welcomed the new directors. “We look forward to working with them collectively to benefit all of our shareholders.”

STRATEGY REVIEW

Exxon needs “a real review of its strategy” in the wake of last month’s International Energy Agency report that challenges the need for new projects if the world wants to reach net-zero emissions by mid-century, said Bess Joffe, head of responsible investment at the Church Commissioners for England.

“The board is going to have to adapt” by giving investors more information on projects and environmental, social, and governance issues, or ESG, said David Larcker, director of the Corporate Governance Research Initiative at Stanford Graduate School of Business.

“It’s just not a company that can turn on a dime,” Larcker cautioned, adding that this year’s budget is set. It is midway into big outlays in Guyana, Brazil, U.S. shale and chemicals, analysts said.

Existing directors believe coupling oil and gas investment with a gradual shift to alternative energy is Exxon’s best path forward, long-time director Ursula Burns said at a virtual event hosted by the Federal Reserve Bank of Dallas last week.

Exxon failed to communicate the importance of that phase-in to investors, she said.

“It has not been well done by Exxon Mobil for sure and that’s one of the things that we have to work on is how do we tell the story,” said Burns, who has served in many roles including as former chairman and CEO of Xerox Corp.

She said Exxon did not pay attention early enough to public frustration over global warming and ESG. Investors, she said, “wanted a direct, in some cases, (and) in some ways, an impossible message to be given.” Burns added that “most of the board” thinks an energy transition is needed and that companies like Exxon need to be engaged in how that happens.

LOCKED-IN PROJECTS

Energy analysts do not see Exxon slashing its biggest ventures – offshore oil in Guyana and Brazil, or liquefied natural gas (LNG) in Asia and the United States – due to long-term commitments. It already has cut spending in the United States and could lower further, they said.

Guyana and Brazil’s offshore fields will be prioritized, said Ruaraidh Montgomery at researcher Welligence. LNG projects that supplant oil production also can help Exxon reduce emissions, said Tom Ellacott, at consultants Wood Mackenzie.

In the United States, Exxon has sharply cut drilling and reduced its shale output goals to 700,000 barrels per day from 1 million. But even there, Exxon’s multi-year projects “are hard to undo,” said Peter McNally, an analyst with investment research firm Third Bridge Group.

However, investors are not buying the poor-messaging explanation or belief that spending decisions cannot be revisited.

“This is a call to reassess fundamentals of supply and demand for energy in the long term, and to question whether Exxon’s current thinking around renewables gaining market share is too modest,” said Stewart Glickman, analyst at CFRA Research, in a client note.

 

(Reporting by Jennifer Hiller in Houston; Editing by Gary McWilliams and Matthew Lewis)

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With grief lingering, Blue Jackets GM Waddell places focus on hockey in wake of Gaudreau’s death

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BUFFALO, N.Y. (AP) — Hearing the familiar sounds of clacking sticks and pucks banging off the boards and glass while watching Columbus Blue Jackets prospects from the stands of a cold rink on a warm late-summer afternoon was not enough to wash away the lingering residuals of grief for Don Waddell on Saturday.

That, the Blue Jackets’ general manager acknowledged, will take more time than anyone can guess — weeks, months, perhaps an entire season and beyond.

What mattered is how spending the weekend attending the Sabres Prospects Challenge represented a start to what Waddell called among the first steps in refocusing on hockey and the future in the aftermath of the deaths of Columbus star Johnny Gaudreau and his brother, Matthew, who were struck by a suspected drunken driver while riding bicycles on Aug 29.

“We got to play hockey,” Waddell said. “We’re not going to forget about Johnny and his family, the Gaudreau family.”

He then reflected on the speech Johnny Gaudreau’s wife, Meredith, made during the brothers’ funeral on Monday, by urging those in mourning to move forward as she will while focusing on raising their children.

“Everybody knows that Johnny wants them to play hockey,” Waddell said. “And everybody’s rallying around that.”

The resumption of hockey in Columbus began last week, when most Blue Jackets players returned to their facility to be together and lean on each other at the urging of Waddell and team captain Boone Jenner. And it will continue on Thursday, when the team opens training camp, exactly three weeks since the Gaudreaus were killed.

“Tragic. Senseless. But now we got to focus on trying to get our team ready to play hockey this year,” Waddell said. “We all mourn and heal differently, but I think as a team being together like that is going to be critical for them to get moving forward.”

Tragedy is no stranger to Waddell or the Blue Jackets.

Waddell was general manager of the then-Atlanta Thrashers in 2003 when Dany Heatley lost control of his car and struck a wall, with the crash killing passenger and teammate Dan Snyder. In 2021, Blue Jackets goalie Matiss Kivlenieks died during a July Fourth fireworks accident.

Waddell placed the emphasis on himself and coach Dean Evason — both newcomers to Columbus this offseason — to guide the team through what will be an emotional season.

“Now, do I think there’s going to be some dark days? I won’t be surprised,” Waddell said.

Reminders of the Gaudreaus’ deaths remain apparent, and reflected in Buffalo on Friday night. A moment of silence was held in tribute to the brothers before the opening faceoff of a game between the Blue Jackets and Sabres.

Afterward, Columbus prospect Gavin Brindley recalled the times he spent with Johnny Gaudreau in Columbus and as teammates representing the United States at the world hockey championships in the Czech Republic in May.

“He was one of the biggest mentors for me at the world championships,” Brindley said. “I couldn’t tell you how many times we hung out with Meredith, pictures on my phone. It’s just so hard to look back and see that kind of stuff.”

The NHL and NHL Players’ Association are providing the Blue Jackets help in the form of grief counseling, crowd security at vigils and addressing hockey issues, such as potentially altering the league’s salary cap rules to provide Columbus relief from having to reach the NHL minimum payroll because of the void left by Gaudreau’s contract.

“The Blue Jackets, I don’t think anybody’s focused from an organizational standpoint, from a hockey standpoint as to what comes next, because I think everybody’s still in shock,” NHL Commissioner Gary Bettman told The Associated Press last week. “I don’t think anybody’s focused right now other than on the grieving part, which is understandable.”

Much of the burden has fallen to Waddell, who has been in discussions with the NHL and the NHLPA and dealing with outreach programs with the Blue Jackets’ partner OhioHealth, while also overseeing preparations for training camp and gauging his prospects in Buffalo.

There’s also his roster to attend to, which he said has two openings at forward, one involving Justin Danforth, who may miss the start of the season because of a wrist injury. Waddell didn’t have to mention the second opening.

Tiring and emotional as it’s been, Waddell found comfort being in his element, a rink, and looking ahead to the start of training camp.

“The guys are in really good shape. We’ve done a lot of testing already and they’re eager to get going,” Waddell said. “We have a reason to play for. And we’ll make the best of it.”

The Blue Jackets later Sunday signed veteran winger James van Riemsdyk to a one-year contract worth $900,000.

“James van Riemsdyk has been a very consistent, productive player throughout his career,” Waddell said. “Bringing him to Columbus will not only provide depth to our group up front, but also valuable leadership and another veteran presence in our dressing room.”

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AP Hockey Writer Stephen Whyno in New York contributed to this report.

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PSG says defender Nuno Mendes target of racial abuse after a French league game

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PARIS (AP) — Paris Saint-Germain defender Nuno Mendes was the target of abusive and racist comments on social media after a French league game.

The club condemned the abuse and expressed its “full support” Sunday for the Portugal left back, who was targeted following PSG’s 3-1 win against Brest on Saturday.

Mendes, who is Black, shared on his Instagram account a racist message he received.

During the match, Mendes brought down Ludovic Ajorque in the box for a penalty that Romain Del Castillo converted to give Brest the lead.

“Paris Saint-Germain doesn’t tolerate racism, antisemitism or any other form of discrimination,” the club said. “The racial insults directed at Nuno Mendes are totally unacceptable … we are working with the relevant authorities and associations to ensure those responsible are held accountable for their actions.”

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Slovenia’s Tadej Pogacar wins Grand Prix Cycliste de Montreal

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MONTREAL – Tadej Pogacar was so dominant on Sunday, Canada’s Michael Woods called it a race for second.

Pogacar, a three-time Tour de France champion from Slovenia, pedalled to a resounding victory at the Grand Prix Cycliste de Montreal.

The UAE Team Emirates leader crossed the finish line 24 seconds ahead of Spain’s Pello Bilbao of Bahrain — Victorious to win the demanding 209.1-kilometre race on a sunny, 28 C day in Montreal. France’s Julian Alaphilippe of Soudal Quick-Step was third.

“He’s the greatest rider of all time, he’s a formidable opponent,” said Woods, who finished 45 seconds behind the leader in eighth. “If you’re not at your very, very best, then you can forget racing with him, and today was kind of representative of that.

“He’s at such a different level that if you follow him, it can be lights out.”

Pogacar slowed down before the last turn to celebrate with the crowd, high-five fans on Avenue du Parc and cruise past the finish line with his arms in the air after more than five hours on the bike.

The 25-year-old joined Belgium’s Greg Van Avermaet as the only multi-time winners in Montreal after claiming the race in 2022. He also redeemed a seventh-place finish at the Quebec City Grand Prix on Friday.

“I was disappointed, because I had such good legs that I didn’t do better than seventh,” Pogacar said. “To bounce back after seventh to victory here, it’s just an incredible feeling.”

It’s Pogacar’s latest win in a dominant year that includes victories at the Tour de France and Giro d’Italia.

Ottawa’s Woods (Israel Premier-Tech) tied a career-best in front of the home crowd in Montreal, but hoped for more after claiming a stage at the Spanish Vuelta two weeks ago.

“I wanted a better result,” the 37-year-old rider said. “My goal was a podium, but at the same time I’m happy with the performance. In bike racing, you can’t always get the result you want and I felt like I raced really well, I animated the race, I felt like I was up there.”

Pogacar completed the 17 climbs up and down Mount Royal near downtown in five hours 28 minutes 15 seconds.

He made his move with 23.3 kilometres to go, leaving the peloton in his dust as he pedalled into the lead — one he never relinquished.

Bilbao, Alaphilippe, Alex Aranburu (Movistar Team) and Bart Lemmen (Visma–Lease) chased in a group behind him, with Bilbao ultimately separating himself from the pack. But he never came close to catching Pogacar, who built a 35-second lead with one lap left to go.

“It was still a really hard race today, but the team was on point,” Pogacar said. “We did really how we planned, and the race situation was good for us. We make it hard in the last final laps, and they set me up for a (takeover) two laps to go, and it was all perfect.”

Ottawa’s Derek Gee, who placed ninth in this year’s Tour de France, finished 48th in Montreal, and called it a “hard day” in the heat.

“I think everyone knows when you see Tadej on the start line that it’s just going to be full gas,” Gee said.

Israel Premier-Tech teammate Hugo Houle of Sainte-Perpétue, Que., was 51st.

Houle said he heard Pogacar inform his teammates on the radio that he was ready to attack with two laps left in the race.

“I said then, well, clearly it’s over for me,” Houle said. “You see, cycling isn’t that complicated.”

Australia’s Michael Matthews won the Quebec City GP for a record third time on Friday, but did not finish in Montreal. The two races are the only North American events on the UCI World Tour.

Michael Leonard of Oakville, Ont., and Gil Gelders and Dries De Bondt of Belgium broke away from the peloton during the second lap. Leonard led the majority of the race before losing pace with 45 kilometres to go.

Only 89 of 169 riders from 24 teams — including the Canadian national team — completed the gruelling race that features 4,573 metres in total altitude.

Next up, the riders will head to the world championships in Zurich, Switzerland from Sept. 21 to 29.

Pogacar will try to join Eddy Merckx (1974) and Stephen Roche (1987) as the only men to win three major titles in a season — known as the Triple Crown.

“Today gave me a lot of confidence, motivation,” Pogacar said. “I think we are ready for world championships.”

This report by The Canadian Press was first published Sept. 15, 2024.



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