# Big Oil Pumps the Brakes on Its Dirty Asset Divestment

An episode of [Switched On](https://invisiblenetwork.ai/podcast/1469286286), 5 Sep 2024, 32 min.

Audio: https://podtrac.com/pts/redirect.mp3/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/01a10738-3608-4dec-883c-ae3c00026b36/3cf11f40-392c-4927-8a84-b1e2008e673d/audio.mp3?utm_source=Podcast&in_playlist=6d114f63-833d-4b78-bbf5-ae3c00026b44

International oil companies have been divesting assets at a surprising rate. Between 2015 and 2023, nine of the world’s largest IOCs have sold a total of $290 billion of assets, with upstream oil assets accounting for half of the divestment deals. Yet this trend toward ditching dirty assets may now be changing, as divestment proceeds dropped 15% last year. On today’s show, co-hosts Dana Perkins and Tom Rowlands-Rees are joined by David Doherty, BloombergNEF’s Head of Oil and Renewable Fuels Research, to discuss the key factors that inform these decisions. As they consider the investment and divestment strategies that major oil and gas companies are now pursuing, they also discuss how public and investor pressure to decarbonize is impacting the sector, how a spike in energy prices in 2022 changed the calculus, and why simply selling dirty assets won’t make for a cleaner world. This episode draws on BNEF research, including the note Oil and Gas Divestment Trends 2023: Divestment Slowed. Complementary BNEF research on the trends driving the transition to a lower-carbon economy can be found at BNEF<GO> on the Bloomberg Terminal or on bnef.com Links to research notes from this episode: Oil and Gas Divestment Trends 2023: Divestment Slowed - https://www.bnef.com/insights/34457 See omnystudio.com/listener for privacy information.

## Transcript

[0:00] Speaker 1: This is Dana Perkins and you're listening to Switched on
[0:03] Speaker 1: the podcast brought to you by BNAF, and today we
[0:06] Speaker 1: talk about divestment. Members of our Sustainable Finance team have
[0:10] Speaker 1: come on this show to discuss the pros and cons
[0:13] Speaker 1: of financial players divesting from companies with high carbon footprints,
[0:17] Speaker 1: but today we talk about the companies themselves, specifically oil
[0:20] Speaker 1: and gas, and how they are divesting from some of
[0:23] Speaker 1: their more polluting assets. However, it's more complicated than that,
[0:27] Speaker 1: and just because an asset has been sold doesn't mean
[0:29] Speaker 1: that it's not emitting anymore, often with less transparency than before.
[0:33] Speaker 1: We'll also discuss the impact of commodity price fluctuations and
[0:37] Speaker 1: how those have impacted the rate of divestment, and how
[0:41] Speaker 1: divestment might tie into a wider business strategy that includes
[0:44] Speaker 1: selling of renewables assets as well. Much of today's show
[0:48] Speaker 1: will focus on the international oil Companies or IOCs, which
[0:51] Speaker 1: are privately owned and operate globally. The Oil Majors are
[0:55] Speaker 1: a subset of six of the IOCs that control the
[0:58] Speaker 1: majority of oil tanker charts during globally. These are different
[1:01] Speaker 1: from the national oil companies or noocs, which are owned
[1:04] Speaker 1: by the governments of sovereign nations and won't come up
[1:07] Speaker 1: as often today. We also compare divestment across upstream, midstream
[1:11] Speaker 1: and downstream. Upstream referring to exploration and production of oil
[1:16] Speaker 1: and natural gas, while downstream refers to converting crude into
[1:20] Speaker 1: finished products such as processing and refining. Midstream, well, it's
[1:24] Speaker 1: in between. It's everything that happens between those two points,
[1:27] Speaker 1: including transportation and storage. Tom erlands Reese joins me in
[1:31] Speaker 1: hosting the show, and we speak with David Doherty, who
[1:34] Speaker 1: is the head of Oil and Renewable Fuels Research here
[1:37] Speaker 1: at BNF. He highlights some findings from the report Oil
[1:40] Speaker 1: and Gas Divestment Trends twenty twenty three Divestment Sload. BNF
[1:44] Speaker 1: clients will be able to find this report at BNF
[1:47] Speaker 1: go on the Bloomberg Terminal, and at BNF dot com.
[1:50] Speaker 1: If you like this show, subscribe on whatever you're listening
[1:53] Speaker 1: to us on now and you'll receive an alert each
[1:55] Speaker 1: week when we publish a new show, And if you
[1:57] Speaker 1: provide us with a review, it'll make us more discoverable
[2:00] Speaker 1: by others. But right now, let's jump into our conversation
[2:03] Speaker 1: with David about oil and gas divestment trends.
[2:15] Speaker 2: Hi Tom, Hi, Dina.
[2:17] Speaker 1: So I've got a co host again today. So Tom
[2:19] Speaker 1: and I are pairing up to speak with David.
[2:22] Speaker 3: Hi Danna, Hi Tom, how are you doing?
[2:23] Speaker 2: So?
[2:24] Speaker 1: I guess let's jump right in into actually kind of
[2:28] Speaker 1: who these companies are, maybe not by name, but is
[2:31] Speaker 1: a group because oil and gas companies can be grouped
[2:33] Speaker 1: into broadly two categories. Right, We've got national oil companies
[2:37] Speaker 1: and international oil companies within that. Are we talking about
[2:41] Speaker 1: both the national and international oil companies or we potentially
[2:45] Speaker 1: only talking about the group of companies that are publicly
[2:48] Speaker 1: listed entities where there are lots of eyes on their
[2:51] Speaker 1: earning statements and divestment potentially is a motivation for them.
[2:56] Speaker 4: Yeah, you're right, we're talking about the international oil company.
[2:58] Speaker 4: So mostly the listed oil producers in Europe and the
[3:02] Speaker 4: US for example, that shall be p.
[3:04] Speaker 1: And what percentage of the overall production of oil and
[3:07] Speaker 1: gas does is actually represent So.
[3:09] Speaker 4: All about twenty percent of the oil or a little
[3:11] Speaker 4: bit over twenty percent of the oil that comes out
[3:12] Speaker 4: of the ground can be represented by these IOSes.
[3:15] Speaker 1: So divestment from some of these acids and we can
[3:18] Speaker 1: talk about which ones are up, mid and downstream in
[3:20] Speaker 1: just a moment. But before we get to that, there
[3:22] Speaker 1: has been a lot of divestment that's taken place over
[3:25] Speaker 1: the last decade plus, but things have started to cool
[3:27] Speaker 1: more recently and the last two years, let's say, we've
[3:31] Speaker 1: seen really elevated commodity prices and this has potentially had
[3:35] Speaker 1: an impact on divestment. Can you talk a little bit
[3:38] Speaker 1: more about that interplay between how much money they're making
[3:41] Speaker 1: from oil and gas and how that's really impacting divestment strategies.
[3:45] Speaker 4: Yeah, there's kind of an inverse relationship when it comes
[3:47] Speaker 4: to divestment and oil prices. You know, when you have
[3:50] Speaker 4: an high oil price, you're more likely to be making
[3:52] Speaker 4: money from your oil asset, right, And it's sort of
[3:55] Speaker 4: common sense. So you do see in periods of low
[3:57] Speaker 4: prices that you see some of those higher breaking in
[4:00] Speaker 4: assets being sold, and when you have high oil prices,
[4:02] Speaker 4: things look a bit rosier, right, so you're more likely
[4:04] Speaker 4: to keep it onto your books.
[4:06] Speaker 2: So I'm just trying to understand this a little bit
[4:09] Speaker 2: because I think that you know, being BNF being focused
[4:13] Speaker 2: on the energy transition, we're always going to think of
[4:15] Speaker 2: what we're seeing in terms of the energy transition. But
[4:18] Speaker 2: if divestment is kind of connected to oil prices, is
[4:21] Speaker 2: there a case that we're seeing oil investment and divestment
[4:25] Speaker 2: is a reflection of what's happening in the with the
[4:27] Speaker 2: oil price globally, and that we are attaching a rational
[4:30] Speaker 2: to it because of the lens that we see the world.
[4:33] Speaker 4: Yeah, there is a little bit of that. I'm not
[4:34] Speaker 4: going to lie the oil industry. When oil prices are high,
[4:37] Speaker 4: the more willing to spend money.
[4:38] Speaker 3: Right.
[4:38] Speaker 4: I would say there's a bit of a trend difference
[4:40] Speaker 4: between the investment and divestment levels that we've seen over
[4:43] Speaker 4: the past few years, where divestment as prices go up,
[4:47] Speaker 4: drops when prices go down, increases on the spending side,
[4:50] Speaker 4: though it has changed a little bit. Normally, when you
[4:52] Speaker 4: have high oil prices, you have high capital expenditure. For example,
[4:55] Speaker 4: all the way up to twenty fifteen, that was pretty
[4:57] Speaker 4: linear in terms of its trend. That's changed a little
[4:59] Speaker 4: bit in the past couple of years because oil and
[5:01] Speaker 4: gas companies have become a lot smarter with how they're
[5:04] Speaker 4: spending their money, way more rational.
[5:05] Speaker 3: They've sort of cut the fat off of their.
[5:08] Speaker 4: Top line, and we've seen a trend now where the
[5:11] Speaker 4: investment is a little bit over half of what it
[5:14] Speaker 4: was in twenty fifteen in the upstream side of stuff.
[5:17] Speaker 4: But it doesn't necessarily mean that the barrels that are
[5:19] Speaker 4: coming out of the ground has half. So it's a
[5:20] Speaker 4: really interesting trend where oil companies have, you know, they've
[5:23] Speaker 4: advanced for technologies, become better at where they're spending their money. So, yeah,
[5:26] Speaker 4: we do sort of look at that, or we're trying
[5:28] Speaker 4: to attach a narrative of divestment means moving towards something else,
[5:31] Speaker 4: but it's probably a bit more fundamental than that.
[5:33] Speaker 3: I would say, Well, so.
[5:34] Speaker 1: Then get into that, because you identified kind of five
[5:37] Speaker 1: key factors that would influence a divestment decision, and can
[5:40] Speaker 1: you talk a little bit more about what those are.
[5:43] Speaker 3: Yeah. Sure.
[5:43] Speaker 4: So the first one is this sort of focused exploration
[5:45] Speaker 4: that I was just talking about. And if we think
[5:47] Speaker 4: back to twenty fourteen, right, we had like one hundred
[5:49] Speaker 4: and twelve one hundred and fifteen dollars for a barrel
[5:52] Speaker 4: of Brent. Now it's in and around eighty, Right, it
[5:55] Speaker 4: doesn't necessarily mean that the sort of focus of that
[5:58] Speaker 4: oil company is going to adjust with that, You're not
[6:01] Speaker 4: going to see a lot lower of investment because the
[6:03] Speaker 4: price has collapsed. You're in fact seeing just a much
[6:06] Speaker 4: more efficient model business model.
[6:08] Speaker 3: In general, oil.
[6:09] Speaker 4: Companies are looking at high return barrels with a much
[6:12] Speaker 4: shorter life cycle than those previous ones we saw years ago,
[6:16] Speaker 4: like you know, deep offshore drilling for example, projects with
[6:19] Speaker 4: like a thirty year lifetime. They've just changed a bit
[6:22] Speaker 4: because the demand cycle in future is a bit less certain, right,
[6:25] Speaker 4: it's not always growing on the demand side. Then you
[6:27] Speaker 4: see competition. That's another one. We're looking at oil companies
[6:30] Speaker 4: for a while, we're quite content to go into a
[6:33] Speaker 4: market with a national oil company in NC for example,
[6:35] Speaker 4: and compete in their domestic market. They're just a bit
[6:38] Speaker 4: more sort of conservative now, i'd say, and they're competing
[6:41] Speaker 4: where they can compete.
[6:42] Speaker 3: There's two parts.
[6:43] Speaker 4: Then after that debt reduction, So spending money to reduce
[6:48] Speaker 4: their debt is a huge trend we've seen over the
[6:50] Speaker 4: past few years.
[6:50] Speaker 3: The financial markets have also rewarded that, which is good
[6:53] Speaker 3: for oil companies.
[6:53] Speaker 4: Like you said, Tom, energy transition is a big part
[6:56] Speaker 4: of their rationale, but it's not the main part of
[6:58] Speaker 4: the rationale. And then only climate related risks. And I
[7:01] Speaker 4: don't mean whether a vent near a refinery. This is politics,
[7:05] Speaker 4: this is consumer pressure. This is pressure from your investors
[7:09] Speaker 4: to change the way you're behaving, so to speak, when
[7:11] Speaker 4: it comes to your business model.
[7:13] Speaker 3: So there's kind of five things we look at there.
[7:15] Speaker 4: That's focusing a bit more competing where you can compete, basically,
[7:18] Speaker 4: reducing your debt, focusing on the transition a bit, and
[7:21] Speaker 4: then climate related risks.
[7:23] Speaker 2: So it's interesting thinking about, you know, the role of
[7:25] Speaker 2: the transition and the climate related risks. They may not
[7:28] Speaker 2: be the main driver, but in a way that you
[7:31] Speaker 2: have the same drivers as you had before, but how
[7:35] Speaker 2: companies are responding to those drivers is changing and that's
[7:38] Speaker 2: what's maybe different.
[7:40] Speaker 3: Yeah. Absolutely, Yeah.
[7:41] Speaker 1: So let's talk about what's actually comprised of this divestment.
[7:45] Speaker 1: So are there themes within this? Is it mostly upstream?
[7:49] Speaker 1: Is it mostly downstream assets? Kind of what assets? Are
[7:51] Speaker 1: you seeing a trend of them offloading?
[7:54] Speaker 4: Yeah, about about half of the assets in twenty fifteen.
[7:58] Speaker 3: That were let's say offloaded, where from the upstream side
[8:01] Speaker 3: of things?
[8:01] Speaker 4: And then the rest is a mix of midstream of
[8:04] Speaker 4: refining and in more recent years actually of renewable assets
[8:07] Speaker 4: in the last two to three years of renewable assets.
[8:09] Speaker 1: So sticking on the upstream stuff for a second, if
[8:11] Speaker 1: they're selling that on, presumably then they are going to
[8:14] Speaker 1: be buying the crude from those companies that they've actually
[8:19] Speaker 1: sold those assets onto or sold those rights onto, to
[8:22] Speaker 1: then use in their refining capacity. Or are we then
[8:25] Speaker 1: thinking that actually, this is an interpretation that largely IOCs
[8:28] Speaker 1: are seeing some amount of peak demand in oil consumption
[8:32] Speaker 1: and that by selling that on they may not necessarily
[8:35] Speaker 1: be as focused on the refining business in the long term,
[8:38] Speaker 1: and that maybe that's going to be in a second wave.
[8:40] Speaker 3: No, I don't think it's that's right forward.
[8:42] Speaker 4: I would pull it back to the very fundamental part
[8:45] Speaker 4: of what oil and gas companies have said they're going
[8:47] Speaker 4: to do. If we think about twenty twenty, no oil
[8:49] Speaker 4: companies had made any pledges towards net zero or reducing emissions,
[8:52] Speaker 4: and we've seen this massive wave since then of saying
[8:55] Speaker 4: I'm going to target lower emissions from my operations.
[8:58] Speaker 3: It's generally an intensity bait metric.
[9:01] Speaker 4: Right, for every barrel I produce or for every duel
[9:03] Speaker 4: i'll produce, I'll reduce my emissions by x percent, right,
[9:06] Speaker 4: and by a given year. So if you sell the
[9:08] Speaker 4: highest emitting assets, you're really helping your energy intensity of
[9:13] Speaker 4: the bowels that you're selling or the jewels that you're
[9:15] Speaker 4: selling into the market.
[9:16] Speaker 3: Right.
[9:16] Speaker 4: The oil market doesn't necessarily take oil out of the
[9:19] Speaker 4: ground and put it through its own refinery and then
[9:21] Speaker 4: sell it in its own fore court.
[9:22] Speaker 3: It's way more mixed than that.
[9:24] Speaker 4: The market is a huge cocktail when it comes to
[9:26] Speaker 4: what goes into the fuel that we see. So you
[9:29] Speaker 4: could be a exon selling your recrued oil to a BP,
[9:32] Speaker 4: for example, for BP to turn into gasoline if it's closer,
[9:35] Speaker 4: if it's cheaper. That's the logic. The market's really efficient
[9:39] Speaker 4: in the oil sector.
[9:40] Speaker 2: So I mean, I'm just thinking back to this whole
[9:42] Speaker 2: trend of it's mostly upstream assets that are being divested from.
[9:46] Speaker 2: Is that partly because in the model you've just described,
[9:48] Speaker 2: things that are further downstream are less exposed to the
[9:52] Speaker 2: global price. It's the upstream assets because in a way
[9:55] Speaker 2: they are buying oil and then selling on refined products,
[9:59] Speaker 2: and so either side of the equation you're sort of
[10:02] Speaker 2: somewhat hedged against. The global oil price is that also
[10:06] Speaker 2: like an indication of how much this divestment is price driven,
[10:09] Speaker 2: is the fact that so much of it is the
[10:11] Speaker 2: upstream part of the business.
[10:12] Speaker 3: Yeah, a little bit.
[10:13] Speaker 4: I mean back to my point when I'm thinking of
[10:15] Speaker 4: I've spent X amount of billion dollars on this project,
[10:18] Speaker 4: than this project is going to take thirty years to
[10:20] Speaker 4: pay me back.
[10:21] Speaker 3: If I'm an oil company.
[10:22] Speaker 4: I'm looking at this on certain trend of evs, this
[10:25] Speaker 4: uncertain trend of sustainable aviation fuels, will people consume oil
[10:29] Speaker 4: and future in thirty years, And I'm thinking, do I
[10:31] Speaker 4: want that thirty year asset on my book, especially if
[10:33] Speaker 4: it's got a high cost and I don't know the
[10:35] Speaker 4: oil price in future. So the focus for these IOCs
[10:38] Speaker 4: has actually been to shift it to a shorter cycle.
[10:40] Speaker 4: An asset that's like a five to ten year turnaround
[10:43] Speaker 4: is very much more attractive now than one that has
[10:45] Speaker 4: a thirty year outlook. That's still sort of firmly in
[10:48] Speaker 4: the world of the NOCs, where the IOCs are trying
[10:51] Speaker 4: to be a bit more agile and how they approach
[10:53] Speaker 4: the market.
[10:54] Speaker 1: So we're talking about selling these assets on though not
[10:57] Speaker 1: winding them down. So I want to know who has
[11:00] Speaker 1: the money to put forward these incredibly capital and intensive
[11:04] Speaker 1: projects that are upstream, and really, in short, you know
[11:07] Speaker 1: who is buying these assets.
[11:10] Speaker 4: Yeah, it's a really interesting question and sort of the
[11:13] Speaker 4: obvious answers other oil companies, and the vast majority are
[11:16] Speaker 4: going to other oil companies, about seventy percent ors. So
[11:19] Speaker 4: you're seeing independent producers like the US jail patch players.
[11:23] Speaker 3: Buying a lot of it.
[11:25] Speaker 4: You're seeing a lot of refiners selling to refiners, fuel
[11:27] Speaker 4: distributors selling to fuel distributors. There is an interesting sort
[11:30] Speaker 4: of trend in the past couple of years where we're
[11:32] Speaker 4: seeing private companies and the financial sector buying some of
[11:35] Speaker 4: these assets. And that's really interesting because they're generally private,
[11:38] Speaker 4: they're generally far less transparent, and they don't face as
[11:41] Speaker 4: much pressure to clean up their assets, for example, to
[11:45] Speaker 4: lower the carbon profile of the barrels. If all of these,
[11:48] Speaker 4: for example, set with these majors who are watched and
[11:51] Speaker 4: everybody focuses on them, I think the chances are that
[11:54] Speaker 4: actually there would be a cleaner barrel in future.
[11:56] Speaker 1: Are investors who are potentially divesting or atleas putting press
[12:00] Speaker 1: sure on the oil majors to think about the carbon
[12:03] Speaker 1: intensity of their portfolio. Are they looking at where these
[12:07] Speaker 1: assets are being sold onto or once they come off
[12:09] Speaker 1: their balance sheet, it's sort of like it's gone and
[12:12] Speaker 1: no longer affiliated with the company. Therefore, the investment community
[12:16] Speaker 1: isn't thinking about that when they're actually looking at ESG.
[12:19] Speaker 3: Yeah, I think you're right there.
[12:20] Speaker 4: Unfortunately, I mean that kind of lens or that thought
[12:23] Speaker 4: process might come to play when you're thinking of investing
[12:26] Speaker 4: in other companies who approchase these assets. But if you're
[12:29] Speaker 4: an investor in the IOC and that comes off the book,
[12:32] Speaker 4: the IOC gets closer towards its target, it doesn't have
[12:34] Speaker 4: this high carbon asset. I don't think it goes beyond
[12:36] Speaker 4: that sort of perimeter.
[12:38] Speaker 2: I'm kind of interested going back to you know, who's
[12:40] Speaker 2: buying this stuff. The one stakeholder that was absent from
[12:44] Speaker 2: your list of buyers, and this surprised me a little bit,
[12:47] Speaker 2: was national oil companies NOCs. Given that they seem to
[12:51] Speaker 2: be very upstream focused and a lot of what we're
[12:53] Speaker 2: talking about being sold is upstream, I thought that they
[12:55] Speaker 2: would have been like the natural buyers.
[12:57] Speaker 4: Yeah, they're actually buying quite a bit as well. Along
[12:59] Speaker 4: with the independence, they're doing it for different reasons. So
[13:02] Speaker 4: independents generally tend to buy assets within their sort of
[13:06] Speaker 4: domestic market.
[13:07] Speaker 3: So jale patch players are.
[13:08] Speaker 4: Actually buying shale patch assetsncs are buying, but for a
[13:12] Speaker 4: very different reason. It generally tends to be they want
[13:14] Speaker 4: to gain access to a market abroad. So we've seen
[13:17] Speaker 4: the Malaysian National Company Patronas purchasing, We've seen PTT of Thailand,
[13:21] Speaker 4: and a lot of that is to do it like
[13:22] Speaker 4: their domestic demand growing, but they're domestic supply declining, so
[13:26] Speaker 4: they're buying to lock in volumes for their home market basically.
[13:29] Speaker 2: So they are not buying assets in their own countries.
[13:33] Speaker 2: Ncs are buying assets abroad.
[13:35] Speaker 4: Yeah, they have to an extent, so let's say saturated
[13:38] Speaker 4: their domestic market. In some cases like Thailand, you see
[13:41] Speaker 4: a huge decline in the reserves of oil, but demand
[13:45] Speaker 4: is not following that, so they're basically securing in supply.
[13:48] Speaker 1: Now you had mentioned this, and I don't want to
[13:50] Speaker 1: just brush over it. You had noted that oil companies
[13:53] Speaker 1: are also starting to divest from some of their renewable
[13:56] Speaker 1: and power related assets. Can you talk a little bit
[13:59] Speaker 1: about that. And where that fits into these kind of
[14:02] Speaker 1: five factors for one would consider when thinking divestment, because
[14:08] Speaker 1: I would think that these renewable assets would actually be
[14:10] Speaker 1: quite related to improving, for example, your climate related risks category.
[14:15] Speaker 4: Yeah, you're one hundred percent right. Firstly, I think oil
[14:18] Speaker 4: and gas companies are sort of damned if they do
[14:19] Speaker 4: and damned if they don't.
[14:20] Speaker 3: Right.
[14:21] Speaker 4: Their approach is that they want to get higher turns
[14:23] Speaker 4: for their investors. Generally, for a wind, solar, renewable energy
[14:27] Speaker 4: production asset that's quite low. It's about let's say six percent,
[14:31] Speaker 4: and the sort of comfort zone for oil and gas companies,
[14:33] Speaker 4: and let's say the upstream side is fourteen plus percent. Right,
[14:37] Speaker 4: that's kind of their target. Sometimes they get there, sometimes
[14:39] Speaker 4: they don't, but there's a magnitude of difference there. What
[14:41] Speaker 4: they've started to do is not necessarily selling the assets
[14:44] Speaker 4: because they're not interest in the asset. They've started to
[14:47] Speaker 4: do a thing called farming down. So farming down basically
[14:50] Speaker 4: means selling an equity stake in an asset.
[14:52] Speaker 3: Right.
[14:52] Speaker 4: If you think of a renewable energy asset, it's got
[14:55] Speaker 4: a risk profile like a utility. I'm not going to
[14:57] Speaker 4: say boring, but oil and gas returns to to fluctuate
[15:00] Speaker 4: up and down. Utilities have a much more boring profile,
[15:04] Speaker 4: which investors in many cases like. So the development phase
[15:07] Speaker 4: of a renewable energy project, the risky part, the part
[15:10] Speaker 4: where you're putting up the offshore wind farms, you're building it,
[15:13] Speaker 4: you've got to get all these things in place, is
[15:15] Speaker 4: a higher risk time. It also has a higher return.
[15:18] Speaker 4: Oil and gas companies love that. So if you're looking
[15:20] Speaker 4: at ecuinor for example, selling off its stake in Duggerbank
[15:24] Speaker 4: off the North Sea, then it increased the returns for
[15:26] Speaker 4: that project to a level in access to twelve percent
[15:29] Speaker 4: where it's more comparable with the upstream side of their
[15:32] Speaker 4: traditional business. So yeah, they're selling them these assets, they're
[15:35] Speaker 4: taking the cash from that, and they're putting it into
[15:37] Speaker 4: new developments, not necessarily always.
[15:39] Speaker 3: Of renewables, but also of renewables.
[15:41] Speaker 4: So when you read the sort of headline number there,
[15:43] Speaker 4: you're like, oh, they're selling off renewable assets. They must
[15:45] Speaker 4: be backtracking on the sort of energy transition story. What
[15:48] Speaker 4: they're actually trying to do is work out ways to
[15:50] Speaker 4: increase the return of those assets.
[15:53] Speaker 1: So let's talk a little bit about some of the
[15:56] Speaker 1: regional trends that we're seeing. And actually, just to set
[15:58] Speaker 1: context for this, the first one really is, you know,
[16:00] Speaker 1: the international oil companies I and the publicly listed oil
[16:04] Speaker 1: companies I would kind of naturally associate with North America
[16:08] Speaker 1: and with Europe and national oil companies I would see
[16:12] Speaker 1: as more active players in other parts of the world.
[16:14] Speaker 1: Is that a reasonable assumption.
[16:17] Speaker 4: Yeah, I think in general that would be correct. Oil
[16:21] Speaker 4: and gas companies that are listed or IOCs. International oil
[16:23] Speaker 4: companies like we're thinking about now, tend to be a
[16:26] Speaker 4: bit more nimble and they're a bit more international in
[16:28] Speaker 4: their operations, and national oil companies tend to be just
[16:31] Speaker 4: that right, national working in the national interest, but they
[16:34] Speaker 4: are using the divestments from IOCs to get into new markets.
[16:38] Speaker 4: So Katar Energy, for example, some of the bigger players
[16:41] Speaker 4: that we hear of in the Middle East are buying
[16:43] Speaker 4: usets in other parts of the world.
[16:45] Speaker 1: So, and that raises a very good point because we're
[16:48] Speaker 1: essentially talking about where the companies are headquartered as opposed
[16:51] Speaker 1: to where their business activities are, which could be anywhere.
[16:54] Speaker 1: But when it comes to where these companies are headquartered
[16:57] Speaker 1: and those who are actually going through this divestment trend
[16:59] Speaker 1: the moment, where is the trend, what parts of the
[17:02] Speaker 1: world are leading the way on this, and also which
[17:05] Speaker 1: companies would you say have been most active.
[17:08] Speaker 4: Yeah, the European IOCs like BP Shell Total Energies, for example,
[17:12] Speaker 4: are probably leading in terms of their divestment, but they're
[17:15] Speaker 4: also leading in terms of their investment in low carbon energies.
[17:19] Speaker 3: There's a few reasons behind that.
[17:20] Speaker 4: Naturally, Europe has more aggressive policies or more targeted policies
[17:24] Speaker 4: when it comes to the transition, but it's also got
[17:27] Speaker 4: a demand profile that's declining much faster than other regions,
[17:31] Speaker 4: so in their home markets this makes sense. Beyond that, though,
[17:34] Speaker 4: there is actually just a cost element of operating in Europe.
[17:36] Speaker 4: So Shell, for example, disclosed that the cost of extracting
[17:39] Speaker 4: oil and gas in Europe it's about one hundred and
[17:41] Speaker 4: forty percent higher compared to the rest of the world.
[17:44] Speaker 4: So when you're a listed company and you're looking at
[17:46] Speaker 4: those kind of costs, that just kind of makes sense, right.
[17:49] Speaker 4: So they're selling those assets in places like the North
[17:51] Speaker 4: Sea or in the US, and generally it tends to
[17:54] Speaker 4: be independent buyers in America or in the North Sea
[17:57] Speaker 4: that are buying those.
[17:58] Speaker 2: I'm kind of curious now it's, you know, the strategies
[18:01] Speaker 2: of individual companies. I was actually in Brazil earlier this
[18:04] Speaker 2: week and presenting some of our content around carbon offsets,
[18:08] Speaker 2: because obviously Brazil has the potential to be a major
[18:11] Speaker 2: player as a supplier of offsets because of their natural resources.
[18:14] Speaker 2: And I had a chart from our team that does
[18:17] Speaker 2: the work on this of who are the top ten
[18:20] Speaker 2: buyers are sets we are actually companies retiring offsets, and
[18:23] Speaker 2: I noticed that in twenty twenty three, I mean, Shell
[18:25] Speaker 2: has always been near the top of that list, and
[18:27] Speaker 2: in twenty twenty three they were the number one retirer
[18:31] Speaker 2: of offsets and buy a huge margin. It was suddenly
[18:34] Speaker 2: this huge step up. And so is that also part
[18:37] Speaker 2: of this picture you're painting is that this is partly
[18:40] Speaker 2: to do with meeting internal targets or voluntary targets.
[18:44] Speaker 4: Yeah, I mean, I wouldn't want to speculate on their
[18:46] Speaker 4: internal strategy. But in the market as a whole, offsets
[18:50] Speaker 4: have come into the mix. We hear the word environmental
[18:52] Speaker 4: markets on trade floors now right, that was never a
[18:55] Speaker 4: thing before, you know, five ten years ago, for example,
[18:58] Speaker 4: we have seen a lot of interest in investments into
[19:01] Speaker 4: things like forestry projects where they compare them with their
[19:04] Speaker 4: oil barrels when they're trading them, and then trade that
[19:06] Speaker 4: as a carbon neutral or a low carbon barrel for example,
[19:09] Speaker 4: in a sort of a package. There's definitely new business
[19:12] Speaker 4: streams oil companies that are more than willing to get
[19:14] Speaker 4: into if there's a good return. This is probably a
[19:16] Speaker 4: good example of that. Beyond that, then they also have
[19:18] Speaker 4: their new Energy's division where they've invested in things like renewables,
[19:22] Speaker 4: utilities even in some senses. So it is a really
[19:25] Speaker 4: interesting time to see how they're getting innovative around lowering
[19:29] Speaker 4: the carbon of each of their jewels that they sell.
[19:31] Speaker 3: That includes offsets.
[19:33] Speaker 1: Right, So we've talked about where in the world this
[19:36] Speaker 1: is happening and some of the companies they're doing. And
[19:39] Speaker 1: I want to know now that we're at this stage
[19:41] Speaker 1: these assets have been sold off, what are the companies
[19:43] Speaker 1: actually doing with the cash that they're receiving.
[19:46] Speaker 4: Yeah, that's a great question, right, So first thing that
[19:49] Speaker 4: comes into your head is they must be spending it, right,
[19:51] Speaker 4: not the case necessarily. We have seen a huge increase
[19:55] Speaker 4: in dividends, paying down net and shareholder buyback. In fact,
[19:59] Speaker 4: if we were going to look at capital expenditure compared
[20:02] Speaker 4: to those three things, CAPEX is actually lower over the
[20:05] Speaker 4: past year compared to shareholder buybacks, debut rey payments, and dividends.
[20:10] Speaker 4: So oil and gas companies are really becoming more financially astute.
[20:13] Speaker 3: I suppose it's the term I would use when it
[20:15] Speaker 3: comes to what they do with their free cash flow.
[20:17] Speaker 4: The main qualm with the renewable energy story for oil
[20:20] Speaker 4: and gas companies is that the returns and the cash
[20:22] Speaker 4: flow are just not high enough compared to their traditional business.
[20:25] Speaker 4: And I think what they're looking at is where can
[20:27] Speaker 4: I spend my money. But if I can spend it
[20:29] Speaker 4: with the return profile that I want, I'm going to
[20:31] Speaker 4: give back to my shareholders.
[20:33] Speaker 3: Certainly in the US.
[20:35] Speaker 2: From my understanding, that trend you've just described, it really
[20:40] Speaker 2: kind of crystallized around the pandemic. You know, I think
[20:44] Speaker 2: that before the pandemic, there were all these stories that
[20:47] Speaker 2: you know, Wall Street was getting concerned investing all these
[20:50] Speaker 2: shale projects, you know, and it was all focused on
[20:52] Speaker 2: expand supply, expand supply, but they weren't seeing the returns.
[20:55] Speaker 2: And then when the price of oil crash, during COVID
[20:57] Speaker 2: it kind of really was like this moment of like, right,
[21:00] Speaker 2: we're going to be disciplined from now on. So is
[21:02] Speaker 2: that also what kind of caused this new financial responsibility?
[21:08] Speaker 2: Is that how it was globally as well? I mean,
[21:10] Speaker 2: I'm only familiar with the US story, but is that
[21:12] Speaker 2: trend how it was for the rest of the world
[21:15] Speaker 2: as well? It was a pandemic induced.
[21:18] Speaker 3: Yes, I know, I think is probably the answer.
[21:20] Speaker 4: So your smaller players in the US shale patch are
[21:22] Speaker 4: really reliant on bank financing for their production profiles, really
[21:27] Speaker 4: and they for example, might need a loan, they might
[21:30] Speaker 4: lock in a hedge with a bank in order to
[21:32] Speaker 4: be even able to get the financing in.
[21:34] Speaker 3: The first place. These big IOCs are.
[21:36] Speaker 4: I mean, they have the balance sheet the same size
[21:39] Speaker 4: as some countries. They don't have to go to a
[21:40] Speaker 4: bank to ask for a loan. They can self finance
[21:43] Speaker 4: many In many cases, this is just them trying to
[21:46] Speaker 4: be more capitally disciplined after really quite a long time
[21:49] Speaker 4: of capital indiscipline up until twenty fifteen twenty sixteen, and
[21:52] Speaker 4: the system got a shock when the shale revolution happened
[21:55] Speaker 4: in twenty fifteen, and it was no longer a standard
[21:58] Speaker 4: to have oil above one hundred dollars per barrel, and
[22:00] Speaker 4: are really plummeted. We had a while there where fifty
[22:02] Speaker 4: was the new norm. We're aut eighty. Now there's still
[22:04] Speaker 4: not one hundred and fifteen dollars per barrel, right, So
[22:06] Speaker 4: they're just becoming more capital discipline and smarter with their money.
[22:09] Speaker 1: Because is it fair to say that not only are
[22:11] Speaker 1: they divesting, you know, you said fifty percent of the
[22:13] Speaker 1: divestments are coming from upstream, but actually this is very
[22:16] Speaker 1: much in line with also a wind down of just
[22:19] Speaker 1: investing in upstream that we're talking about right now.
[22:22] Speaker 4: Yeah, there's definitely lower volumes of dollars going into the
[22:26] Speaker 4: upstream for these nine companies that we have listed in
[22:29] Speaker 4: this report. For example, I think in twenty fifteen, their
[22:31] Speaker 4: upstream investment was about one hundred and sixty billion dollars
[22:34] Speaker 4: in twenty fifteen, and it's now about ninety billion dollars.
[22:37] Speaker 4: But again, bringing back that sort of efficiency in the
[22:39] Speaker 4: system that doesn't necessarily translate into a much lower volume
[22:43] Speaker 4: of actual oil being invested into. They're just smarter at
[22:48] Speaker 4: investing and they've dropped the costs of their operations significantly
[22:52] Speaker 4: since then.
[22:53] Speaker 1: We're here to talk about divestment, but I can't help
[22:56] Speaker 1: but actually talk a little bit for a moment about
[22:59] Speaker 1: some of the things that these companies actually are doing.
[23:02] Speaker 1: So we're talking about the IOCs. Not only have they
[23:05] Speaker 1: been divesting from some of their low carbon assets, but
[23:08] Speaker 1: we have seen a scale of investment actually go up
[23:10] Speaker 1: in that space. Can you talk a little bit about that.
[23:13] Speaker 1: Basically that the divestment is not necessarily aligned with where
[23:16] Speaker 1: they're investing internally, They're maybe just moving things around or
[23:20] Speaker 1: folding them into new assets. And what does that trend
[23:23] Speaker 1: look like? And I know that that ranges depending upon
[23:26] Speaker 1: where in the world you are.
[23:27] Speaker 3: Yeah, it's an interesting question.
[23:28] Speaker 4: What are they're spending their money on and what they're
[23:31] Speaker 4: spending their money on, what does it tell us about
[23:33] Speaker 4: their future? And for a few years before twenty twenty,
[23:35] Speaker 4: before the pandemic, basically we saw an awful lot of
[23:38] Speaker 4: investment into green electrons or low carbon electrons. Everybody wanted
[23:41] Speaker 4: to be utility solar wind And since then we've seen
[23:44] Speaker 4: a big change in the strategy of IOCs and where
[23:47] Speaker 4: they're spending their money, and it's turned into what we
[23:49] Speaker 4: call the sort of clean molecule becoming the dominant focus area.
[23:53] Speaker 4: That is bio and renewable fuels for example, like ethanol,
[23:56] Speaker 4: sustainable aviation fuel, renewable diesel, and it's things like high
[24:00] Speaker 4: drogen and carbon capture in storage. These are things that
[24:03] Speaker 4: can clean up the molecules they produce, or can clean
[24:05] Speaker 4: up the traditional business of an oil and gas company.
[24:08] Speaker 4: So that could be for example, green hydrogen going into
[24:11] Speaker 4: your refinery so that the emissions from that asset drop,
[24:13] Speaker 4: or it could be renewable power being purchased into a
[24:16] Speaker 4: refinery or to power an offshore oil platform, or it
[24:19] Speaker 4: could be carbon capture in order to capture the emissions
[24:21] Speaker 4: from any of these things and again lower the carbon
[24:24] Speaker 4: profile of what is essentially an oil product. So they're
[24:27] Speaker 4: keeping some of their traditional the more comfortable assets for them,
[24:30] Speaker 4: but they're adapting as to how they lower the carbon
[24:32] Speaker 4: footprint for them. And that's predominantly because they're comfortable with
[24:34] Speaker 4: that the technology and it's a higher return for them generally.
[24:38] Speaker 3: It's really interesting.
[24:39] Speaker 2: I mean, I want to just return to this question
[24:41] Speaker 2: of returns because as when you were talking about it before,
[24:43] Speaker 2: and I was just thinking I heard an economist talking
[24:46] Speaker 2: about the power sector and wind assets and the whole
[24:51] Speaker 2: situation on the war in Ukraine in Europe where the
[24:55] Speaker 2: gas price went super high. Therefore the power price went
[24:57] Speaker 2: super high, and if you were owning a window or
[25:00] Speaker 2: solo asset, then that would mean a lot of profit.
[25:02] Speaker 2: And then I don't know because I've been in the US,
[25:05] Speaker 2: but you know he was talking about then the government
[25:07] Speaker 2: came in and was like, win full taxes on all
[25:09] Speaker 2: of this. You can't just profit off insane the high
[25:13] Speaker 2: commodity prices. Am I making a false correlation? It seems
[25:16] Speaker 2: like since then that's where we've seen maybe less excitement
[25:19] Speaker 2: in clean electrons from the oil and gas sector. And
[25:23] Speaker 2: it's because they're used to playing in global markets where
[25:26] Speaker 2: no one's going to come along and take away your money.
[25:28] Speaker 2: If you've profited from a spike in prices, like do
[25:31] Speaker 2: you think that's what gave them the ick a little
[25:33] Speaker 2: bit when it came to electricity.
[25:35] Speaker 3: I don't think so.
[25:36] Speaker 4: I think they're you know, big strong boys and girls,
[25:38] Speaker 4: and the oil companies. I don't think they're necessarily worried
[25:40] Speaker 4: about that long term. I think really maybe what turned
[25:43] Speaker 4: it a little bit was it became okay again to
[25:46] Speaker 4: invest in an oil and gas asset after twenty twenty two,
[25:49] Speaker 4: when we saw prices go through the roof and we
[25:51] Speaker 4: saw inflation follow diesel. Everything that gets your parcel to
[25:54] Speaker 4: your door, for example, your pocket when you're going out
[25:57] Speaker 4: to drop your kids to school is hurt by the
[25:59] Speaker 4: gasoline prices. It then became okay to bring more oil
[26:02] Speaker 4: onto the market and to invest further. So we saw
[26:05] Speaker 4: some of the IOCs, for example, just their strategy so
[26:08] Speaker 4: that they shift away from producing oil and gas in
[26:10] Speaker 4: a slower fashion than they had previously stated that they would,
[26:13] Speaker 4: and they got a lot of noise for that as well. Right,
[26:15] Speaker 4: But it became more okay to bring oil onto the market.
[26:19] Speaker 4: And that's partially because when we think of sanctions, and
[26:22] Speaker 4: we think of international wars and the changing landscape in
[26:25] Speaker 4: the last two and a half years, a lot of
[26:26] Speaker 4: the oil that was in the world is no longer
[26:29] Speaker 4: able to shift into these markets, particularly where the IOCs
[26:32] Speaker 4: are headquartered, like North America and Europe.
[26:35] Speaker 2: I suppose, I mean where I was really kind of targeting.
[26:38] Speaker 2: My question was not so much them shifting away from
[26:41] Speaker 2: clean electrons to oil, but within the Green part of
[26:44] Speaker 2: their strategy the shift from electrons to molecules where they're
[26:48] Speaker 2: not utilities and therefore are less subjects to boring returns.
[26:53] Speaker 4: Right Yeah, But there's also a lot more overlap and
[26:55] Speaker 4: the technology.
[26:56] Speaker 3: I think that's one of the core elements of it.
[26:58] Speaker 4: If we think renewable fuel, that's using refineries for the
[27:01] Speaker 4: most part, right to make a liquid energy duel that
[27:04] Speaker 4: goes into something like an airplane. So they're happy and
[27:07] Speaker 4: comfortable with it, and they get government pressure. We've had
[27:09] Speaker 4: the Inflation Reduction Act which makes that more profitable. Again,
[27:12] Speaker 4: we've had the Green Deal in Europe which makes a
[27:14] Speaker 4: lot of that mandated. So the support change from the
[27:17] Speaker 4: policy site since then has really moved in favor of
[27:19] Speaker 4: that as well.
[27:20] Speaker 2: Right, So it's helped them do the thing that they're
[27:22] Speaker 2: good at, correct, and they're more likely to get good
[27:25] Speaker 2: returns doing the thing they're good at rather than just
[27:29] Speaker 2: being another investor in with SOLA.
[27:31] Speaker 4: And they're really well placed. They have the infrastructure, they
[27:34] Speaker 4: have the smarts, they've got the money, so they can
[27:36] Speaker 4: scale something like a startup could never do.
[27:38] Speaker 1: When it comes to divestment, broadly speaking, do you expect
[27:41] Speaker 1: this trend to continue.
[27:43] Speaker 4: Yeah, it's a normal, normal part of the function of
[27:47] Speaker 4: oil and gas companies reassessing their portfolio, seeing what works,
[27:50] Speaker 4: seeing what doesn't work, seeing where they're competitive, have their
[27:53] Speaker 4: competitors in a certain market become better, and are they
[27:56] Speaker 4: losing out?
[27:57] Speaker 3: So this will continue.
[27:57] Speaker 4: You'll see flipping of assets in any industry, the speed
[28:00] Speaker 4: of which obviously changes. And you know, in the oil market,
[28:03] Speaker 4: oil prices make it a quiet year for the investment.
[28:06] Speaker 4: Low oil price makes it a sort of exciting year
[28:08] Speaker 4: for the devestment.
[28:09] Speaker 1: Well, because I have often seen these kind of top
[28:11] Speaker 1: ten heaviest emitters lists and they name out companies that
[28:14] Speaker 1: are associated with these really high carbon emissions. And ultimately,
[28:19] Speaker 1: as divestment continues, assuming that a good amount of it
[28:22] Speaker 1: will continue to be in these high carbon assets, do
[28:25] Speaker 1: we ultimately think this will just make for a much
[28:27] Speaker 1: more fragmented market.
[28:29] Speaker 4: There's a huge potential for that, Yeah, particularly if you
[28:31] Speaker 4: think of high emitting assets. And we've seen it in
[28:34] Speaker 4: the past, IOCs selling high emitting assets to cowboys, and
[28:39] Speaker 4: you know the difficulty with that is, yes, the book
[28:42] Speaker 4: of the IOC looks cleaner, but the world is in
[28:45] Speaker 4: any better or the sector as a whole is no
[28:47] Speaker 4: better off. It's just moved into another hand with less
[28:51] Speaker 4: less exciting or less ambitious targets to decarbonize, and less
[28:54] Speaker 4: capability to decarbonize. I think really the IOCs have the
[28:57] Speaker 4: most capable technologies to lower the carbon of any of
[29:00] Speaker 4: these things.
[29:01] Speaker 3: That they're trying to sell, any of the jewels.
[29:02] Speaker 2: But do you think then? I mean, and you gave
[29:05] Speaker 2: a really great presentation at our Barrel of Tomorrow in
[29:08] Speaker 2: Houston about this very subject of a world where potentially
[29:13] Speaker 2: oil is differentiated not just on price, but on how
[29:16] Speaker 2: green it is.
[29:17] Speaker 3: Correct me if I'm wrong.
[29:17] Speaker 2: That was what I took away from your thought, and
[29:21] Speaker 2: that seems to be, you know, from a global perspective,
[29:24] Speaker 2: a better trend than divestment. So what has to happen
[29:28] Speaker 2: for them to have the right incentives to do that?
[29:31] Speaker 2: And as you say, they're probably the best positioned people
[29:34] Speaker 2: to do that.
[29:35] Speaker 1: So yeah, how do we change this top ten list
[29:37] Speaker 1: to actually reflect true decarbonization as opposed to just smaller emitters.
[29:43] Speaker 3: Yeah, I mean that's a tough question.
[29:44] Speaker 4: I think low carbon, low cost, I think was the
[29:46] Speaker 4: goal I was talking about in Houston with you, Tom
[29:49] Speaker 4: It's tough. I mean, you're seeing different parts of the
[29:51] Speaker 4: world start to enact policies that are encouraging this. Whether
[29:54] Speaker 4: it's like the carbon border adjustment mechanism in Europe, for example,
[29:58] Speaker 4: rewarding a low carbon that product would be anything but
[30:01] Speaker 4: oil as a product, right. And you're also seeing certain
[30:04] Speaker 4: sectors bring in carbon prices or some form of carbon
[30:07] Speaker 4: mechanism in order to incentivize the lower carbon duel of
[30:11] Speaker 4: energy going into your car, for example. So there's a
[30:13] Speaker 4: bunch of policies that are starting to really take grip
[30:16] Speaker 4: now and grow and become mature.
[30:18] Speaker 3: That are starting to have an impact.
[30:20] Speaker 4: That could be the eu ETS, the European Carbon trading
[30:23] Speaker 4: system being applied to shipping, and now it makes things
[30:26] Speaker 4: like methanol competitive or renewable diesel competitive with fuel oil,
[30:30] Speaker 4: which is traditionally one of the cheapest oil products. So yeah,
[30:33] Speaker 4: they're working. The market's so fragmented though that unless there's
[30:37] Speaker 4: like a global carbon market, it's going to be a
[30:39] Speaker 4: slow and piecemeal sort of development of this competitiveness of
[30:44] Speaker 4: cost different industries.
[30:45] Speaker 1: And here we are talking about global carbon markets as
[30:48] Speaker 1: an idea yet again, which always seems to rear its
[30:51] Speaker 1: head when we get to cops, so we'll see if
[30:52] Speaker 1: that comes up again in November. David, thank you so
[30:55] Speaker 1: much for joining Tom and I today and sharing your
[30:57] Speaker 1: thoughts on oil and gas divestment.
[30:59] Speaker 3: Thanks guys, thanks for chating.
[31:09] Speaker 1: Today's episode of Switched On was produced by Cam Gray
[31:12] Speaker 1: with production assistance from Kamala Shelling. Bloomberg NIF is a
[31:16] Speaker 1: service provided by Bloomberg Finance LP and its affiliates. This
[31:19] Speaker 1: recording does not constitute, nor should it be construed, as
[31:22] Speaker 1: investment in vice, investment recommendations, or a recommendation as to
[31:26] Speaker 1: an investment or other strategy. Bloomberg ANIF should not be
[31:28] Speaker 1: considered as information sufficient upon which to base an investment decision.
[31:32] Speaker 1: Neither Bloomberg Finance Lp nor any of its affiliates makes
[31:35] Speaker 1: any representation or warranty as to the accuracy or completeness
[31:39] Speaker 1: of the information contained in this recording, and any liability
[31:42] Speaker 1: as a result of this recording is expressly disclaimed.

Shows are listed from Apple Podcasts' charts and directory, and Podcast Index where it is used. Every show and episode belongs to its publisher and plays from the publisher's own feed; this site hosts none of them.