The Strategist

Debts of global oil leaders rise by $32B

04/06/2020 - 03:34

The largest oil companies in the world have increased their debts by $ 32 billion in recent weeks, according to the Financial Times (FT). Among them are ExxonMobil, BP, Royal Dutch Shell, Total and Equinor.

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The publication notes that oil giants are resorting to any measures to cope with the consequences of the COVID-19 pandemic and the collapse of oil prices. They are reducing capital expenditures by postponing or refusing to buy back stocks, reducing costs and moving projects to later dates. At the same time, oil producers by all means are trying to avoid refusing to pay dividends to shareholders. Since mid-March, companies began to actively use debt instruments, issuing dollar and Eurobonds, the newspaper notes.

“We see the same thing as in previous crises: those who can raise funds through bonds do this,” says Senior Banker at Societe Generale Brandon Moran, as quoted by the Financial Times. “It helps them maintain liquidity, and also demonstrates that they have the opportunity to finance.”

So, Shell raised € 3 billion and $ 3.75 billion this week, BP - € 3.25 billion and $ 3.25 billion, Total and Equinor received € 3 billion and $ 5 billion, respectively, and Exxon raised $ 8 a few weeks ago.