Big Oil Ripe For M&A, But Capital Is Hesitant

Exxon’s historic ouster from the Dow after a 92 year run is emblematic of the restructuring that the energy industry is facing. With investors looking for tech options, and crude oil stuck at about $40 per barrel despite OPEC cuts, the oil industry as a whole ought to be on the verge of major consolidation. Equity firms are leery, however. The company’s balance sheets are under too much pressure. The underlying asset is still valuable, but factors like the pandemic and climate change are cutting into its value to such an extent that the companies that are structured around extracting it are not very attractive.