Oil major ExxonMobil Corporation (XOM - Free Report) recently made its first move against the lawsuits filed against it by California local governments. San Francisco, Oakland, San Mateo County and four other local governments in California had alleged last year that the activities of ExxonMobil and other oil companies led to climate change and posed threats to their regions.
Local Governments’ Views
Along with other casualties the Oakland government believes the sea level will rise 66 inches by 2100 due to climate change. The San Mateo County fears there is 93% chance that it will face a devastating flood in the next 30 years due to the same reason. The San Francisco government blamed climate change for the floods in its low-lying areas.
Per the company, the officials had engaged in power abuse by using government investigation and legal action to put pressure on oil producers. ExxonMobil's court filing in Tarrant County, TX includes seeking permission for questioning and gathering reports from the government officials who sued the company for billions.
ExxonMobil, which has a Zacks Rank #2 (Buy), further argued that the city governments in question said in the municipal bond offerings that the risks regarding climate changes are unpredictable, which contradicts their allegation. This gave the oil giant the scope to accuse the municipalities of committing fraud.
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The other oil companies sued by the governments include Anadarko Petroleum Corporation (APC - Free Report) , BP plc. (BP - Free Report) , ConocoPhillips (COP - Free Report) and others.
Notably, The New York City government filed a similar lawsuit this week against several oil majors, which includes ExxonMobil, claiming that that the oil companies together are responsible for producing 11% of the global-warming gases over the years.
About the Company
Irving, TX-based ExxonMobil is the world’s largest publicly traded oil and gas firm. The company has a leading position in the energy industry owing to the size and diversity of its asset base, both in terms of business mix and geographical footprint. With a stable cash position, the integrated energy player’s balance sheet is one of the best in the industry, reflecting declining debt load over the first nine months of 2017.
We appreciate ExxonMobil’s plans to combine its refining & marketing businesses as this will allow the company to take better decisions and boost performance. ExxonMobil will generate more cashflow from downstream activities, also helping it counter the volatility in its upstream business.
ExxonMobil has lost 0.8% of its value in the last year against the 10.7% rise witnessed by the industry it belongs to.
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