Meet NextEra, America’s most valuable energy firm 22 October 2020
TO MANY INVESTORS, backing an American oil company looks only slightly shrewder than stuffing cash in a blender. Facing covid-19 and old concerns over low returns, the industry is scrambling to boost efficiency. On October 19th ConocoPhillips said it would pay $9.7bn for Concho Resources, a Texan fracking firm. The next day two other frackers, Pioneer Natural Resources and Parsley Energy, announced a $4.5bn tie-up. Across the sector, oilmen are vowing to put profits before growth. How about a firm that offers both?
As America’s oil industry flails, its most valuable utility, NextEra, has soared. It is already the world’s top generator of wind and solar electricity. When NextEra presented its latest quarterly results on October 21st, it said it now has about 15 gigawatts of renewable projects in its pipeline, larger than its entire existing renewables portfolio. Net profit jumped to $1.3bn, up by 13% year on year.
Oil bosses have long dismissed utilities as solid but staid, less energy goliath than grandpa. “We have much higher expectations for the returns on the capital we invest,” Darren Woods, boss of ExxonMobil, proclaimed in 2018. Since then his oil major’s market capitalisation has sunk, by 60%. NextEra’s has soared past it to $147bn. It is now America’s most valuable energy company. And it is not slowing down…