Oxy CEO Vicki Hollub doesn’t seem worried about White House pressure on buybacks, oil prices
Occidental (long known as Occidental Petroleum) was the No. 1-performing stock in S&P 500 last year, but it didn’t get there by way of massive growth in oil and gas production. While fossil fuels have the tailwind of the Russia-Ukraine war resetting energy policy and priorities around the globe, on Wall Street, it’s the recent capital discipline displayed by energy companies that has been as a big a factor in market performance.
The boom and bust cycles of the past when oil rig count exploded in line with the latest high price in crude oil are now seen as a cautionary tale. “We’ve seen that movie before,” Hess CEO John Hess said at the annual CERAWeek energy conference on Tuesday. That new fiscal approach from the energy patch has not made the White House happy, especially when oil prices and oil company profits were at a peak last year. The blowback from President Biden has continued, with recent buyback programs from companies including Chevron attracting renewed scrutiny. But when you listen to the way Chevron CEO Mike Wirth talked about its plans to increase the level of buybacks for shareholders, it seems the White House was an afterthought — if any thought was given to it.
Long-time energy sector analyst Paul Sankey put it this way after the recent Chevron earnings call: “I would be absolutely certain many in the White House own Chevron stock in their 401ks. In DC, it is clear that politicians have no comprehension of 1) what a buyback is and 2) how many Americans own stocks in their pension funds/401ks. The tone of Mike’s delivery, and he is a relaxed and confident guy, indicated that they were not really considering Washington, D.C.”
Wirth isn’t the only one sitting in the driver’s seat at a major oil and gas company who seems to have little time to worry about the way the White House views stock buybacks.
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Occidental’s approach has attracted the world’s most-famous investor, with the company quickly growing to be among the top 10 stocks held by Warren Buffett’s Berkshire Hathaway over the past several years (second to Chevron among Buffett’s public energy stock holdings). Buffett recently made clear (for the umpteenth time) what he thinks about politicians weighing in on buybacks.
With roughly 12% production growth, Occidental could produce more. And in fact, one point the White House has made is that oil companies are spending too much on “enriching” shareholders and not enough on producing more. But when asked by CNBC’s Brian Sullivan on Monday at CERAWeek if the company could produce more, Occidental CEO Vicki Hollub answered in a direct way that defies any concern about political pressure:
“We do,” Hollub said, have the ability to produce more oil, “but we have a value proposition that includes an active buyback program and also a growing dividend and we always want to make sure we max out our return on capital employed. So we are very careful with how we structure our capital program on an annual basis to make sure we still have sufficient cash to buy back shares.”
This year, Occidental authorized a new $3 billion share repurchase authorization and a 38% increase to its dividend. It completed $3 billion in share repurchases last year, with $562 million of repurchases in the fourth quarter.
Frederick Forthuber, president of Oxy Energy Services, said separately at CERAWeek that U.S. oil production will grow by about 500,000 barrels per day this year, with 80% or 90% of that coming from the Permian basin, according to Reuters. Hollub noted in her CNBC interview that current capacity as measured in total barrels produced per day — nearly 12 million bpd in 2022 and projected by the EIA to reach over 12 million bpd this year — has not changed significantly from the pre-pandemic world, though the EIA forecast would be a new record. Its outlook for gas prices is an average $3.57/gallon this year.
For consumers still worried about the price of gas at the pump, which has come down significantly along with crude prices from last summer’s high, don’t look to Hollub for more relief. Gas prices are right where they should be right now, she says, and are likely to stay this way.
“Prices are in a good place right now, in the $75-$80 range. That’s a sustainable price scenario for the industry to continue to be healthy and gas prices at the pump are not so bad at this price.”
In fact, she described the situation as “optimum.”
“I do believe the mid-cycle price of oil is close to $80, maybe $75 to $80,” Hollub said. “In that price regime we can balance supply with demand over time,” she added.
If there is risk to gas prices this year, it’s to the upside. “I do think towards the end of the year we will have a little supply issue relative to demand, and it could send prices higher,” she said.
And while the energy CEOs are showing through their words and actions this year that they aren’t buying the White House “Big Oil” rhetoric and will continue to message to the shareholders they’ve been able to win back, Hollub does expect one notable oil buyer to remain on the sidelines this year: the White House.
Amid high gas prices last year, the Biden administration released the most oil from the Strategic Petroleum Reserve on record, 180 million barrels. While the administration has said it will be replenishing the SPR, Hollub doesn’t expect much buying.
“I think we should have more storage in the SPR and over time the administration will buy that storage back and start to refill, but it’s gonna be hard to do any time in the next couple of years, because I do believe we are in a scenario where prices will be higher.”
Among the reasons oil prices will remain higher?
“Lack of supply and lack of investment in our industry over the years,” Hollub said. “I do think they are going to have a difficult time here in the near term.”
Based on the way the oil CEOs are talking, maybe in more ways than one.
Environment
Electreon and Xos to deploy wireless charging for commercial EV deliveries like UPS in Michigan
The State of Michigan has announced a new partnership with wireless EV charging specialist Electreon and Commercial EV manufacturer Xos, Inc. Together, the companies have secured funding from the state to expand wireless charging availability for commercial vehicles, including UPS trucks in Detroit.
It’s been nearly a year since the Michigan Department of Transportation (MDOT), the City of Detroit, and Electreon ($ELWS) unveiled the first wireless EV charging roadway in the United States.
Michigan installed Electreon’s wireless inductive-charging coils (seen below) on 14th Street in Detroit between Marantette and Dalzelle streets to charge EVs equipped with Electreon receivers as they drive on the road.
At the time. MDOT and Detroit officials said the road would be used to test and perfect Electreon’s wireless EV charging technology in a real-world environment before “making it available to the public in the next few years.”
While the public will not be able to take advantage of wireless charging just yet, commercial EVs are gaining access thanks to a new partnership between Electreon, Xos ($XOS), and the State of Michigan.
Michigan progresses as US wireless EV charging leader
When Michigan announced the first wireless EV charging road in the US last year, officials shared hopes that the Great Lakes State and the city of Detroit could become leaders in the innovation and and deployment of such nascent technology.
Following a press release from Electreon, the State of Michigan confirmed details of the new partnership, which now includes commercial EV developer Xos, Inc. as well. The new commercial partnership is supported by $200,000 in funding from the Michigan Mobility Funding Platform (MMFP), building off the state’s “Make it in Michigan: economic strategy, developed by the Michigan Economic Development Corporation (MEDC) to invest in the state’s people, places and projects.
Through the partnership and coinciding state funding, Electreon will extend its wireless EV charging network and use cases in Michigan. Additionally, Electreon’s technology will be integrated into delivery step vans from Xos in order to “demonstrate wireless charging technological value and its potential to lower the total cost of ownership (TCO) in the electrification of commercial truck fleets.” Stefan Tongur, vice president of business development for Electreon, elaborated:
We’re excited to demonstrate how Electreon’s technology can optimize electric fleet usage and showcase the seamless integration of wireless charging into daily fleet operations, minimizing downtime and enabling charging across time and location. We’re proud to do this work in Michigan, a state fostering innovation and sustainable transportation solutions.
In addition to expanding wireless charging on Detroit’s first “electric roadway,” the Michigan project will enable the installation of stationary wireless charging at a UPS facility in Detroit. Xos co-founder and CEO Dakota Semler also spoke:
We are proud to partner with Electreon and support UPS to demonstrate the potential of wireless charging in commercial fleets. This innovative approach will revolutionize how we power our electric vehicles and drive fleet electrification forward.
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![Here's our first look at Jaguar's new luxury electric 4-door GT [Images]](https://i0.wp.com/electrek.co/wp-content/uploads/sites/3/2024/11/Jaguars-electric-GT.jpeg?resize=1200,628&quality=82&strip=all&ssl=1)
The iconic British luxury automaker is undergoing a major brand overhaul. With its official debut around the corner, Jaguar’s electric 4-door GT, the first of its new series, was spotted testing on British roads. The new images give us a closer look at what we can expect from the revamped Jag brand.
Jaguar’s new electric GT makes its first appearance
After building internal combustion-powered sports cars for over 75 years, Jaguar will become an all-electric luxury brand from 2025.
The company announced earlier this year that it will start fresh with an entirely new range of EVs. After killing off the F-Type, E-Pace, XF, and soon the F-Pace SUV, we are finally getting our first look at what the new branding will look like.
Jaguar’s new electric 4-door GT was caught testing on British roads. The camouflaged prototypes reveal a radically different look than the Jag models we are accustomed to.
You can see one of the biggest changes is the low-riding, extended silhouette, as opposed to the crossover SUV and sedan models like the F-Type and I-Pace, Jaguar’s first EV.
The front and rear bumper designs also appear much more aggressive and bold than previous models.
Jaguar’s electric GT is being put through the paces ahead of its debut. It has already completed tens of thousands of testing miles (virtual and real-world) and will soon hit public streets worldwide.
The new model will be built in Solihull, UK, where Jaguar recently ended production of its gas-powered models.
It will be the first to ride on Jaguar’s new JAE (Jaguar Electric Architecture), which will underpin its upcoming lineup of high-end luxury EVs with prices over £100,000 ($130,000). The electric GT will have a range of over 434 miles (700 km) and upwards of 575 hp, making it Jaguar’s most powerful car of all time.
Jaguar will debut its Design Vision Concept at Miami Art Week on December 2, 2024. Next Summer, it’s expected to make its official global debut ahead of deliveries in 2026.
What do you think of Jaguar’s new design based on what’s shown? Are you excited about the brand overhaul? Let us know in the comments below.
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Environment
Tesla pushes end-to-end neural networks for highway driving, but only for newer vehicles
Tesla has pushed a new (Supervised) Full Self-Driving update with the promised end-to-end neural networks for highway driving.
However, it’s only for newer vehicles.
“End-to-end” is what Tesla refers to as neural net-powered AI driving the vehicle from vision to controls rather than the controls being explicitly coded. It’s already the case in all widely released versions of (Supervised) Full Self-Driving (FSD) for city driving, but not for highway driving, which uses another software stack.
Tesla originally planned to deliver it for highway driving in October, but it was only delivered to a small number of vehicles.
In its latest AI roadmap, Tesla said that it would come the first week of November instead.
Now, Ashok Elluswamy, Tesla’s head of self-driving and AI, said that the latest release with end-to-end highway driving (v12.5.6.3) has been widely pushed to HW4 vehicle owners:
With the latest release (v12.5.6.3), FSD is using end-to-end neural networks for driving across highways, city streets and parking lots, and has now shipped widely for AI4 vehicles. Highway driving should be smoother, more natural and even safer than the previous explicit control stack. Check out the different driving styles to set speed and lane change preferences. Enjoy and let Tesla AI know if you have any feedback.
However, there’s no word for the millions of HW3 vehicle owners.
In fact, the only thing promised to HW3 vehicles, which Tesla now called AI3, in its last roadmap is this:
Improved v12.5.x models for AI3 city driving
As we have often reported this year, Tesla has reached the limits of the HW3 computer and now needs to optimize the code with every release despite still being far from its promise of unsupervised self-driving.
Electrek’s Take
This is annoying cause I could really use end-to-end on my HW3 car. I am on v12.5.4.2 and it has been a regression from v12.5.4.1 for me, especially on highways.
Yesterday, it almost drove me off-road when taking my highway exit, which is always a bit shaky because it is a short exit and FSD often swings itself into it. It’s a bit awkward, and my girlfriend never likes it, so I disengage FSD before taking the exit when she was with me, but this time, she wasn’t, and I had the new update.
It again swung left before going right into the exit, but this time, it went way too far, and I was in the shoulder by the time I took control.
I took this exit hundreds of times with FSD and it’s the first time it did that.
I am starting to think we won’t see much more improvements to FSD with HW3 cars and there’s no retrofit computer in sight.
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