Job cuts mount in the energy industry as oil markets fail to recover

Welcome to Insider Energy, a weekly energy newsletter brought to you by Business Insider.

Here's what you need to know:

• Want to get Insider Energy in your inbox every Friday? Sign up here.

• Do you have feedback or story tips? Reach out to me at bjones@businessinsider.com.

I love waking up, feeling good for exactly one second, and then plunging into chaos.

President Donald Trump's positive coronavirus test rattled the economy Friday, and oil futures were not spared. Let's start there.

Why oil fell, and what it means for the energy industry

Price check: Already down Thursday, the price of Brent crude — the international benchmark — slid as much as 5% Friday morning, dipping below $39 a barrel. At last check, it's close to reaching $40 again.

Why? The president testing positive for COVID-19 only intensified concerns that the pandemic will continue to hammer oil demand, which largely determines the commodity's price.

Who cares? Oil traders, stockholders, and companies that extract and sell oil.

• Oil companies surveyed by the Federal Reserve Bank of Dallas need the price of US crude to be somewhere between $46 to $52 to profitably drill a new well.

• The price of US crude (which is different than Brent) fell below $37 a barrel on Friday morning.

When will demand recover? Earlier this month, Bank of America laid out a timeline for the return of oil demand and price. You can read that here.

Shell reveals new details of its transformation including deep job cuts

Shell unveiled new details this week about its highly anticipated plan to transform into a more sustainable power company, a la BP.

• Days earlier, Reuters' Ron Bousso scooped details on Shell's "Project Reshape," an internal review that appears in line with the company's Wednesday announcement.

Key changes: Shell is cutting up to 9,000 jobs. Here are the kinds of roles most at risk.

• The company plans to shrink the number of refineries it operates to fewer than 10.

• Shell is also looking to reduce spending on oil and gas production by 30% to 40%, per Reuters.

• But the firm's CEO said Shell would still sell "some" oil in 2050, at which time the company will be a net-zero power producer.

• You can find all of the details here.

In other news: Marathon Petroleum, the largest US oil refiner, is laying off more than 2,000 workers, about 12% of its workforce, the company said this week in a public filing.

We're tracking how 20 companies are responding to cheap oil prices, from filing for bankruptcy to laying off staff. You can see all the updates here. 

Exxon tightens its grip on Guyana's vast oil resources

In the months after oil collapsed, companies shut-in wells and announced plans to pivot away from fossil fuels.

Meanwhile, Exxon is looking to dramatically boost production in Guyana, a small South American country sandwiched between Venezuela and Suriname.

The news: On Wednesday, Exxon received government approval for a third oil-drilling project, set to produce crude by 2024.

• The new development, known as Payara, is Exxon's third offshore drilling project in Guyana.

• The company estimates that the Stabroek block — where it operates through a partnership with Hess Corp and China's CNOOC — is home to more than 8 billion barrels of recoverable oil.

The big picture: Guyana, a relatively poor country, is poised to become one of the world's largest oil producers — thanks to Exxon — raising a bunch of questions about the country's future development.

• Critics of Exxon fear the country will succumb to Dutch disease.

Do you have thoughts on Exxon's role in Guyana or information about the company? Let me know! You can reach me by email or through WhatsApp/Signal/Text at 1-646-768-1657.

The winners and losers when hydrogen explodes into a $2.5 trillion market

Hydrogen is like fusion energy — it gets a ton of attention but most of its climate benefits have yet to materialize. Analysts at Bank of America say that's set to change.

In their words: "We believe we are reaching the point of harnessing the element that comprises 90% of the universe, effectively and economically," they wrote in a report earlier this month.

• Hydrogen "could supply our energy needs, fuel our cars, heat our homes, and help to fight climate change," they added.

The climate opportunity: Most hydrogen gas today is used as an industrial feedstock and is made with fossil fuels. Falling costs of renewable energy enable cheap production of the gas through electrolysis.

• Plus, there's growing interest in cars and planes powered by hydrogen fuel cells, which don't produce emissions.

The market opportunity: The hydrogen economy is on track to generate annual revenues of $2.5 trillion by 2050, the bank said, citing the Hydrogen Council.

• The bank highlighted the winners and losers as the hydrogen economy booms. You can see all of those here.

6 big stories we didn't cover this week

• Climate change and clean energy made a surprising appearance in a chaotic first presidential debate, Greentech Media reports.

• Shale producers Devon Energy and WPX Energy said they would merge through an all-stock deal to form one of the nation's largest shale companies, the Wall Street Journal reports.

• NextEra, the biggest clean-energy producer in the US, approached utility Duke Energy about a takeover, the Wall Street Journal reports. "Duke rebuffed the approach," per The Journal.

• Battery unicorn Northvolt raised another $600 million in equity, Reuters reports.

• Smoke from California's recent wildfires caused solar-energy generation to plunge in the state, according to the Energy Information Administration.

• The Supreme Court said it will review a petition from BP, Chevron, and other big oil companies to kick climate cases out of state courts and into the hands of federal judges instead, Bloomberg Law reports.

That's it! Wishing you a restorative weekend.

- Benji

Ps. I'm always looking for feedback, which you can drop me by email.

Read the original article on Business Insider