New York AG Probes Exxon for Stranded Asset Risk
New York State Attorney General Eric Schneiderman is pressing ExxonMobil Corporation with an interesting question: After seeing world oil prices fall more than 60% over the last couple of years, and with tougher global carbon controls on the near horizon, why hasn’t the company acknowledged the falling value of its oil and gas reserves?
The fossil price crash “has forced many integrated oil producers around the world to write down the value of their assets,” Reuters reports. “Exxon is the only major producer holding out so far.” The news agency cites a Wall Street Journal report that Schneiderman is looking into the “price assumptions Exxon uses to book its reserves.”
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But the fossil behemoth says there’s nothing to see here. “The company said in a filing in February that an assessment of its major risky assets showed that future undiscounted cash flows associated with such assets ‘substantially exceed’ their carrying value,” Reuters notes.
Earlier this month, analysts with the brokerage firm Jeffries reported that integrated oil companies had written down US$103 billion in assets since early 2014. “The brokerage also said it expected more asset impairments in the industry,” Reuters reports. (h/t to iPolitics for first pointing us to this story)