Arab Today, arab today looking for deals amid oil crash
Last Updated : GMT 18:11:48
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Chief Rex Tillerson:

Looking for deals amid oil crash

Arab Today, arab today

Arab Today, arab today Looking for deals amid oil crash

Chief Rex Tillerson
New York - Arab Today

ExxonMobil hopes to take advantage of the oil price crash to acquire other petroleum companies, but will wait for the right opportunity, chief executive Rex Tillerson said Wednesday.

Tillerson alluded to the company's history of big takeovers during oil busts, as when Exxon acquired Mobil in 1999.

That deal expanded Exxon's presence in key oil producers such as Kazakstan and Nigeria. A 2009 acquisition of XTO Energy significantly boosted its holdings in US shale.

Analysts at an ExxonMobil investor day said they were surprised that, given the current market conditions, the company had not made a big acquisition to boost its portfolio of oil and gas plays.

As US prices have fallen from more than $100 a barrel in July 2014 to the current $34 a barrel, many smaller oil producers have seen profits dry up and face problems paying debts.

Tillerson said there are many "quality resources" that could boost ExxonMobil's holdings, but that potential targets are setting unrealistic terms for a buyout.

"Expectations have yet to come in line for sellers," he said.

Tillerson also said some producers have "destroyed" the value of their companies by taking on more debt or diluting equity as they try to stay afloat.

"We're just going to have to wait," he said.

Tillerson said nothing has changed yet in the crude market despite the crash.

"We're still oversupplying and overproducing for a market that doesn't need it," he said.

Global economic conditions are also uncertain, with Europe struggling to maintain growth and China's economy slowing.

"I don't think we can look to the market demand side to solve this problem quickly," he said.

ExxonMobil plans a 2016 capital budget of $23 billion, down 25 percent from 2015.

The oil giant has held off from green-lighting major projects. In some cases, ExxonMobil's plans have been delayed by partners who have not wanted to move ahead.

"There's been a bit of a pause, appropriately so, on the next wave of major multi-year projects," he said.
Source :AFP

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