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ExxonMobil lesson may guide Chevron ESG efforts

  • Market: Crude oil, Natural gas, Oil products
  • 13/09/21

Chevron will have its work cut out to convince investors and climate campaigners that it is taking the energy transition seriously enough as the oil major gets ready to unveil its low-carbon plans.

The second-biggest US oil producer will be keen to avoid the fate of ExxonMobil, the target of a campaign by activist investors this year in part over a perceived failure to communicate a clear strategy to address its environmental footprint. The company was forced to replace three board members with outside candidates.

At an energy transition event on 14 September, Chevron will need to strike a delicate balance between showing it is taking meaningful steps on the climate front without straying too far from its core business. The US majors, unlike their European peers, have so far resisted calls to set out net zero targets, arguing that fossil fuels will be needed for decades, and Chevron may stick to that policy.

"It seems very unlikely that Chevron management will choose to follow what the European Big Oils have done and set a carbon neutrality target," US bank Raymond James director and equity research analyst Pavel Molchanov says. "That said, a meaningful step in that direction — not all the way to net zero, but a substantial reduction in emissions — would be welcomed by investors."

While in the past it might have been sufficient just to set out targets, regulators and shareholders are now demanding greater disclosure when it comes to firms' plans to address emissions. That includes the portion of the capital programme that will be allocated to renewable and/or low-carbon initiatives, the technologies they plan to use, the timeframe and the regions where they will be deployed.

Chevron may reiterate existing targets to curb carbon intensity and clamp down on flaring, according to consultancy Rystad Energy senior analyst Palzor Shenga. Potential divestments such as its 20pc stake in the Athabasca oil sands project in Canada would also help reduce its carbon footprint, he says.

The pressure on Chevron to speed up its energy transition plans was in full view at its last annual meeting in May, where around 60pc of shareholders ignored the board's recommendation and voted for a non-binding motion calling on the company to cut emissions generated by the oil and fuel it sells.

Exxon marks the spot

Chevron recently followed in the footsteps of ExxonMobil and set up a low-carbon unit. Chevron New Energies will initially focus on hydrogen and carbon capture as it seeks out new technologies that can be scaled up. Chief financial officer Pierre Breber used a recent earnings call to set out the producer's preferred choices to meet its decarbonisation goals. Renewable fuels are favored given their proximity to Chevron's traditional business, but large-scale wind or solar are not as the company does not have a competitive advantage in those areas.

To that end, the firm has announced a number of carbon-friendly initiatives in the past few weeks. It has teamed up with US agricultural commodity firm Bunge to use soybean oil as a feedstock for biodiesel and sustainable aviation fuel (SAF). It has also expanded a deal with California-based waste solutions provider Brightmark RNG to convert waste at dairy farms into renewable natural gas, and plans to sell a test batch of SAF to US carrier Delta Air Lines. And it has signed hydrogen partnerships with companies including heavy equipment manufacturer Caterpillar.

With Chevron poised to grow its prized Permian holdings in coming years, that could also help support its environmental goals, given that the assets have a carbon intensity below the group average, Canadian bank RBC Capital Markets says. "Ramping up the Permian would not only be positive for earnings and free cash flow, but it could also help reduce carbon intensity metrics materially," it says.

Chevron and ExxonMobil share index

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27/02/25

US seeks to dismiss suit about RFS delay

US seeks to dismiss suit about RFS delay

New York, 27 February (Argus) — The US has asked a court to dismiss a case over a missed deadline for updating the Renewable Fuel Standard (RFS), a move that could portend further delays in setting new biofuel blend mandates. Ethanol industry group Growth Energy and biomass-based diesel group Clean Fuels Alliance America sued late last year, asking the US District Court for the District of Columbia to compel the US Environmental Protection Agency (EPA) to set required renewable fuel volumes for 2026. Under the Clean Air Act, the government must set new RFS mandates at least 14 months in advance of a compliance year. Lawyers for EPA and the US Department of Justice in a court filing this week agreed that President Donald Trump's administration is behind the legal schedule for updating the program. But they said that the biofuel groups registered their discontent too early, submitting notices of intent to sue before EPA had missed the deadline, and that the case should be dismissed on those technical grounds. The Clean Air Act allows groups to sue the government 60 days after filing these notices, but the Trump administration is arguing that the law only authorizes suits after notice of an existing — not prospective — harm. "The anticipatory pre-violation letters plaintiffs sent here fail to provide notice of any actual violation," the filing argues. Growth Energy and Clean Fuels' respective notices to the government came in July last year, months before the agency missed its Clean Air Act deadline. But both notices pointed to a plan from President Joe Biden's administration to finalize new RFS volumes more than a year behind schedule in December 2025. The groups must now respond to the government's dismissal request, delaying the case's ultimate resolution. Biofuel groups have long been at loggerheads with EPA over its delays implementing the program, which requires oil refiners and importers to blend biofuels into the conventional fuel supply, but the government's new legal strategy differs from recent cases. In 2022, Growth Energy sued the administration of President Joe Biden first over its delays finalizing 2021-2022 volumes and then again later that year over late 2023 volumes. In both those cases, EPA published a proposed consent decree in the Federal Register within 30 days of the biofuel group's respective complaints to the court. In the first case, EPA finalized new blend mandates within four months of Growth Energy's filing, and in the second case, EPA finalized volumes within 14 months. The timing of notices of intent to sue does not appear to have come up in those cases, even though Growth told EPA in one notice it could sue over 2022 volumes a few weeks before the agency had missed the deadline. The Trump administration's apparent efforts to avoid negotiating an agreement in the new case suggests that final volumes for 2026 and beyond could take longer than market participants have expected, adding to deep uncertainty in the sector about future policy incentives. Multiple biorefineries have idled or shut down in the past year. Trump's efforts to cut much of the federal workforce and slash spending could also impact EPA's timeline for updating the RFS, a highly technical program that has historically proven vulnerable to legal challenges. The longtime director of EPA's fuel programs office left the government late last year. EPA did not immediately comment on its timeline for proposing or finalizing new RFS volumes. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Upper Mississippi River ice thickens before March


27/02/25
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27/02/25

Upper Mississippi River ice thickens before March

Houston, 27 February (Argus) — Ice measurements near the upper Mississippi River were thicker than the previous readings, the US Army Corps of Engineers (Corps) reported on 26 February. The Lake Pepin ice depth results traditionally help determine when the upper Mississippi River will reopen for spring transit. The second ice measurements taken this week revealed deeper ice than the week prior . The ice along mile 770 of the lake thickened by 1in to 20in which is also thicker than the same time last year. This measurement is 4in more than the five-year average for the period and slightly above average for overall ice thickness for this time of the year, according to the Corps. Nevertheless, ice did melt at the ends of the Lake because of warmer temperatures this week. If high temperatures and winds continue through the coming weeks, Lake Pepin's ice will begin to dissipate, said Corps civil engineering technician Alan Vanguilder. But should temperatures fail to increase by mid March, the reopening of the upper Mississippi could be delayed. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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End of waiver endangers Venezuela's 1mn b/d aim


27/02/25
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27/02/25

End of waiver endangers Venezuela's 1mn b/d aim

Caracas, 27 February (Argus) — Venezuela has no plan for compensating for a production decline expected after Chevron's waiver that allows it to export crude runs out under the order of US president Donald Trump. Chevron had been exporting about 200,000 b/d to the US and importing condensate needed to dilute Venezuela's extra-heavy crude. This helped to push Venezuela's reported figure including liquids and condensates to 1.035mn b/d in January, although Argus estimates crude-only production at closer to 840,000 b/d. But the waiver that allowed Chevron to make investments there directed at exports to the US only will not be renewed on 1 March , Trump said on Wednesday, casting his decision as retaliation for Venezuela for not receiving enough migrants deported from the US. Chevron likely will have at least until August to wind down its operations in Venezuela, based on the terms of the license, but the US has not revealed details of the process. There are few immediate solutions to replace that support, government officials and sources at oil companies said. Venezuelan president Nicolas Maduro downplayed the change, saying no "threat" will hurt "the will of the Venezuelan people to advance towards their independence, towards their freedom and towards their maximum happiness". Maduro threatened to jail any opposition politicians who have encouraged the US to remove the waiver as a way to pressure him out of office. Without Chevron investing in the joint-venture projects with state-owned PdV, it will be difficult for Venezuela to recover output elsewhere. "Maduro was caught by surprise," a political analyst in Caracas who asked not to be named said. "In Chavista circles [close to Maduro] the chatter was centered around normalization, Trump getting closer to [Russian president Vladimir] Putin, all that good stuff. Now this. They don't have a plan." Oil interrupted PdV and partners including Chevron, Eni and Repsol produced 1.051mn bl on 5 February, the highest level since 2018 and slightly higher than the January monthly average of 1.035mn b/d, according to the latest PdV production report seen by Argus. The FPO or Faja division was producing 601,800 b/d that day; while Occidente (Zulia) added 281,500 b/d and Oriente,149,400 b/d. Smaller producing areas include Los Llanos, with 11,900 b/d; offshore division Costa Afuera with 2,000 b/d and PdV Gas with 4,600 b/d. That production figure includes at least 35,000 b/d of condensate imported by Chevron. Venezuela may import as much as 165,000 b/d of condensate and lighter crude used to transport and upgrade Orinoco extra heavy crude, or 16pc of total reported production, Venezuelan oil economist Rafael Quiroz estimates. By Carlos Camacho Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Nigeria’s Dangote refinery buys Saharan Blend


27/02/25
News
27/02/25

Nigeria’s Dangote refinery buys Saharan Blend

London, 27 February (Argus) — Nigeria's 650,000 b/d Dangote refinery has bought its first cargo of Algeria's light sweet Saharan Blend crude, according to market sources. Dangote bought the 1mn bl cargo from trading firm Glencore this week, sources said, adding that it is due to be delivered over 15-20 March. The deal was not directly confirmed be either party and the price is unknown. None of the tankers that have loaded in Algeria so far in February have flagged Africa as their destination, suggesting this cargo will load in March. One trader noted that Saharan Blend's quality is suitable for the Dangote refinery and that it is competitively priced compared to Nigerian grades. Nearly 420,000 b/d of crude was delivered to Lekki for Dangote so far this year, with about 82pc of that made up of light sweet grades, Vortexa data show. Nigerian crude accounted for 87pc of all arrivals. The March-loading trade cycle for Saharan Blend was slow to kick off due to sluggish demand in Europe because of seasonal refinery maintenance and ample light crude supply. This may have encouraged buyers in Europe to hold off on purchases of Saharan Blend in anticipation of weaker price differentials, prompting sellers to look to alternative outlets. Saharan Blend prices have dropped by $1/bl over the course of this month, when March-loading cargoes were trading, and now stand at a 20¢/bl discount to the North Sea Dated benchmark on a fob Algeria basis. By Melissa Gurusinghe and Sanjana Shivdas Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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UK 2024 bitumen consumption drops 10pc


27/02/25
News
27/02/25

UK 2024 bitumen consumption drops 10pc

London, 27 February (Argus) — UK bitumen consumption fell by 10.5pc last year compared with 2023 and hit the lowest level since 2016, data from the UK government's department for energy security and net zero (DESNZ) shows. The UK consumed 1.38mn t of bitumen in 2024. In the fourth quarter bitumen demand fell by 5.4pc to 322,000t compared with the same period of 2023, although December consumption rose by 3.75pc on the year to 83,000t. The fall in 2024 continues a downward trend in bitumen consumption since 2021 in the UK. Domestic consumption fell by 25.1pc between 2021 and 2024 and production dropped by 38pc over the same period, despite a rise in production last year. Production rose by 20.3pc on the previous year to 449,000t in 2024, despite lower fourth quarter output, when the UK produced 51,000t of bitumen, 16.3pc lower than in the fourth quarter of 2023. The highest output was in the second quarter last year, with the highest quarterly output since the second quarter of 2021. Output during the winter months tends to drop as cold weather halts much road building and maintenance. Insufficient government funding for road paving projects is limiting bitumen demand. UK finance minister Rachel Reeves allocated £500mn ($631mn) to road maintenance in October, but England alone needs £14.4bn as a one-time catch up cost, according to industry organisation the Asphalt Industry Alliance. By Tim van Gardingen Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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