It seems that the oil majors have found the perfect culprit to blame for their less than stellar stock prices. This week, several CEOs of oil majors are expected to name climate change and technology as the two most important factors “scaring investors away.”
The CEO of Norway’s state-owned oil company Equinor mentioned these issues today, and BP PLC’s CEO is expected to delve into these issues as the primary causes of the crisis of confidence he believes are driving BP’s poor performance in the equities market. Both BP’s and Equinor’s CEOs believe the problems can be eliminated by fostering engagement between the companies and those who criticize them for their contribution to climate issues. The CEO of Royal Dutch Shell echoed the same concerns.
But are concerns over climate change really what’s driving investors away from big oil right now?
Perhaps investors are more concerned with the fact that low oil prices have depressed these companies’ revenue and profits. For example, ExxonMobil had earnings of $44.9 billion in 2013, but its net income for 2017 was only $19.7 billion.
Long-term investors might be more concerned about the drop in investmentfrom big oil companies in long-cycle, capital intensive projects. The companies have simply cut back on exploration and major projects that would be necessary to produce crude oil and natural gas in the long-run. Instead, companies like Chevron and Exxon are focusing on short-cycle projects in the Permian Basin that won’t yield stable revenue over the long-term.
No matter how much big oil tries to focus its investor relations on its climate mitigating activities, these companies cannot change the fact that their primary products are all hydrocarbons. It cannot be good for investor confidence to repeatedly question the morality of one’s own business.
This article originally appeared on Forbes