Chevron's market value surpasses ExxonMobil for the first time

According to a report by Bloomberg News in Houston on October 7, 2020, the market value of Chevron, the second largest U.S. oil company, recently surpassed Exxon Mobil, the largest listed oil company in the United States, and became the largest oil company in the United States by market value. This is the first time the market value of this Texas-based American oil giant has been replaced by Chevron since it started as Standard Oil more than a century ago.

At the close of trading in the United States on October 7, California-based Chevron had a market value of $142 billion, while Exxon had a market value of $141.6 billion.

The epidemic has led to a plunge in energy prices this year, and the entire oil and gas industry has been affected. But among the large oil companies, Chevron’s balance sheet performed the strongest. The company recently completed its $5 billion acquisition of Noble Energy. In contrast, ExxonMobil is striving to create enough cash to cover capital expenditures, which makes it dependent on debt and puts tremendous pressure on its annual dividend of $15 billion.

For more than a year, Chevron has been approaching its long-term rivals, even before the epidemic overwhelmed oil demand. Chevron has been focusing on Chevron’s shale business, cutting costs and strictly controlling new projects. Exxon has implemented a series of costly projects, which are expected to achieve growth after years of production stoppage, but when the epidemic hit, these projects dragged down Exxon Mobil's cash flow.

The two U.S. oil giants’ biggest rivals in Europe, BP and Royal Dutch Shell, are also facing their own problems. Their share prices have plummeted after cutting valuable dividends earlier this year. Some analysts believe that Exxon Mobil may be the next company to cut its dividend. Goldman Sachs Group analysts said in a report a few days ago that until 2025, the US oil giant will not be able to fund dividends unless it reduces cash expenditures or sells assets.