Good morning, here's what the Oilman has for you today:

• Exxon Moves Forward with Lithium Bet

• Lenders Fail to “Punish” Oil and Gas with Higher Borrowing Costs

• Upcoming Oil and Gas Events

• Tweet of the Day

Exxon Moves Forward with Lithium Bet

Exxon has started drilling for lithium at a site in Arkansas.

The supermajor bought the drilling rights to the plot earlier this year.

The plan is to turn into one of the largest lithium suppliers in the U.S.

Going where the money is… supposed to be

Exxon paid more than $100 million for the Arkansas drilling right.

That hints it’s pretty serious about going big-time into lithium.

And why shouldn’t it, when the Biden admin is so eager to build local supply chains?

The question is: will they be built fast enough?

I mean, EV makers are already complaining about weak sales, and the IRA hasn’t even taken off fully.

But it has spurred many into action to build EV battery plants – or at least say they will build them.

It seems Exxon has decided to join the electric party.

It has the means, after all.

The long game that activists hate

Exxon’s lithium move is the equivalent of the Europeans’ venture into all things transition.

It’s a bet on long-term business sustainability, that is, ensuring the company survives and thrives.

Activists don’t like Big Oil going green.

They probably feel cheated or something.

But Big Oil didn’t become Big by pleasing activists.

It did it by planning and executing growth strategies proven to work based on the results.

Now, the strategy involves turning into Big Energy of All Sorts.

Pretty smart, come to think of it.

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Lenders Fail to “Punish” Oil and Gas with Higher Borrowing Costs

Oil and gas companies are not paying higher interest on their loans, S&P Global has discovered.

Apparently, this is not how things should be, per the Financial Times.

The pariah industry

S&P Global analyzed developments in borrowing costs for various industries since 2010.

It found something deeply unsettling.

Oil and gas companies saw their borrowing costs rise just about as much as other industries.

Except when oil and gas prices were low.

“Environmental concerns seem to be far from the most important factor for funding oil and gas companies,” the rating agency said.

How untransitional.

And how interesting that this is the case when so many banks have made pledges to restrict funding for oil and gas.

Per S&P, the effect of these pledges is yet to manifest.

“Oil and gas are not going to go away”

That’s according to one of the authors of the analysis.

Yet banks are signaling they will tighten their lending rules for oil and gas firms.

They call it reducing their Scope 3 emissions.

That’s funny because, since 2021, debt issuance by oil and gas firms has fallen.

Because of bumper profits.

Less access to funding will lead to less production.

Which will lead to higher oil prices…

And more bumper profits for the producers.

Yep. Oil and gas are definitely not going to go away.

Banks’ profits from lending to them, however, may shrink along with their Scope 3 emissions.

Upcoming Oil & Gas Events

• November 28: TIPRO/IPAA Leaders in Industry Luncheon, Petroleum Club of Houston, Houston, TX

• November 28: NDPC Christmas Gala, Lumen Vitae University Center, Bismarck, N.D.

• November 28-29: UTA Oil and Gas Conference, Hilton Americas, Houston, TX

• November 29: DUG Appalachia Conference & Exhibition, David L. Lawrence Convention Center, Pittsburgh, PA

• November 30: IPAA Texas Hold’Em Tournament, The Post Oak Hotel, Houston, TX

Around the Global Patch

🇦🇿 Energy partnership: Azerbaijan to provide gas to Serbia.
🇫🇷 Elevating ambitions: France's low-carbon energy vision.
🇵🇦 Panama Canal restrictions impact U.S. LNG prices.

Tweet of the Day

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