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



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.”


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.


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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Trudeau says he discussed border with Biden, but no deal



Prime Minister Justin Trudeau said on Sunday he has spoken with U.S. President Joe Biden about how to lift pandemic-related border restrictions between the two countries but made clear no breakthrough has been achieved.

U.S. and Canadian business leaders have voiced increasing concern about the ban on non-essential travel in light of COVID-19 that was first imposed in March 2020 and renewed on a monthly basis since then. The border measures do not affect trade flows.

The border restrictions have choked off tourism between the two countries. Canadian businesses, especially airlines and those that depend on tourism, have been lobbying the Liberal government to relax the restrictions.

Canada last week took a cautious first step, saying it was prepared to relax quarantine protocols for fully vaccinated citizens returning home starting in early July.

Trudeau, speaking after a Group of Seven summit in Britain, said he had talked to Biden “about coordinating measures at our borders as both our countries move ahead with mass vaccination.” Canada is resisting calls for the border measures to be relaxed, citing the need for more people to be vaccinated.

The United States is ahead of Canada in terms of vaccination totals.

“We will continue to work closely together on moving forward in the right way but each of us always will put at the forefront the interests and the safety of our own citizens,” Trudeau told a televised news conference when asked the Biden conversation.

“Many countries, like Canada, continue to say that now is not the time to travel,” Trudeau added, though he said it is important to get back to normalcy as quickly as possible.


(Reporting by David Ljunggren in Ottawa; Editing by Will Dunham)

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Man with 39 wive dies in India



A 76-year-old man who had 39 wives and 94 children and was said to be the head of the world’s largest family has died in north east India, the chief minister of his home state said.

Ziona Chana, the head of a local Christian sect that allows polygamy, died on Sunday, Zoramthanga, the chief minister of Mizoram and who goes by one name, said in a tweet.

With a total of 167 members, the family is the world’s largest, according to local media, although this depends on whether you count the grandchildren, of whom Ziona has 33.

Winston Blackmore, the head of a polygamous Mormon sect in Canada, has around 150 children from 27 wives – 178 people in total.

Ziona lived with his family in a vast, four-story pink structure with around 100 rooms in Baktawng, a remote village in Mizoram that became a tourist attraction as a result, according to Zoramthanga.

The sect, named “Chana”, was founded by Ziona’s father in 1942 and has a membership of hundreds of families. Ziona married his first wife when he was 17, and claimed he once married ten wives in a single year.

They shared a dormitory near his private bedroom, and locals said he liked to have seven or eight of them by his side at all times.

Despite his family’s huge size, Ziona told Reuters in a 2011 interview he wanted to grow it even further.

“I am ready to expand my family and willing to go to any extent to marry,” he said.

“I have so many people to care for and look after, and I consider myself a lucky man.”


(Reporting by Alasdair Pal and Adnan Abidi in New Delhi; Editing by Raissa Kasolowsky)

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Huawei CFO seeks publication ban on HSBC documents in U.S. extradition case



Huawei Chief Financial Officer Meng Wanzhou on Monday will seek to bar publication of documents her legal team received from HSBC, a request opposed by Canadian prosecutors in her U.S. extradition case who say it violates the principles of open court.

Meng’s legal team will present arguments in support of the ban in the British Columbia Supreme Court.

Meng, 49, was arrested at Vancouver International Airport in December 2018 on a warrant from the United States, where she faces charges of bank fraud for allegedly misleading HSBC about Huawei Technologies Co Ltd’s business dealings in Iran and potentially causing the bank to break U.S. sanctions on business in Iran.

She has been under house arrest in Vancouver for more than two years and fighting her extradition to the United States. Meng has said she is innocent.

Lawyers for Huawei and HSBC in Hong Kong agreed to a release of the documents in April to Meng’s legal team on the condition that they “use reasonable effort” to keep confidential information concealed from the public, according to submissions filed by the defense on Friday.

Prosecutors representing the Canadian government argued against the ban, saying in submissions filed the same day that “to be consistent with the open court principle, a ban must be tailored” and details should be selectively redacted from the public, rather than the whole documents.

A consortium of media outlets, including Reuters News, also opposes the ban.

The open court principle requires that court proceedings be open and accessible to the public and to the media.

It is unclear what documents Huawei obtained from HSBC, but defense lawyers argue they are relevant to Meng’s case.

Meng’s hearing was initially set to wrap up in May but Associate Chief Justice Heather Holmes granted an extension to allow the defense to read through the new documents.

Hearings in the extradition case are scheduled to finish in late August.


(Reporting by Moira Warburton in Vancouver; Editing by Howard Goller)

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