US and EU Focus on Net Zero, but
US Fossil Fuel Companies Thrive
European Firms Struggle with Various Regulations
Practical Feasibility Virtually 'Zero'
Seen as Indirect Criticism of Government and Politics
European ‘oil giants’ such as TotalEnergies and Shell are eyeing opportunities to list on the U.S. stock market. With ‘net zero (carbon neutrality)’ being a hot topic mainly in advanced countries like the U.S. and the European Union (EU), U.S. fossil fuel companies are still thriving compared to their European counterparts. Since European fossil fuel companies hold a significant share in European stock markets, if this materializes, the shock within Europe is expected to be inevitable, but analysts say the likelihood of this happening is very low.
On the 6th (local time), The New York Times (NYT) cited statements from the CEOs of major European fossil fuel companies, TotalEnergies (France) and Shell (UK), reporting that these companies are considering switching their listings from European stock markets to the U.S. stock market. TotalEnergies has even developed concrete execution plans, whereas Shell only mentioned that “there is a possibility,” indicating a difference in stance between the two companies.
Patrick Pouyann?, CEO of TotalEnergies, told the NYT, “After board discussions that concluded the issue needs to be seriously considered, I spoke with analysts about related matters regarding (the switch to the U.S. stock market).” Shell’s CEO Wael Sawan expressed openness to considering a U.S. stock market listing but said, “There are currently no concrete plans.”
Although the U.S. and EU administrations are actively promoting carbon neutrality, the fact that the U.S. fossil fuel industry is performing well in reality is cited as a factor driving European oil giants to consider listing on the U.S. stock market. The U.S. became the world’s largest oil producer last year, producing over 13 million barrels per day, surpassing major oil producers such as Saudi Arabia and Russia. Additionally, since the end of last year, mergers and alliances among U.S. fossil fuel companies like ExxonMobil and Chevron have been actively taking place.
In contrast, in Europe, oil production continues to decline due to eco-friendly policies and the introduction of windfall taxes. Activist funds urging “reduce carbon emissions” also have a strong voice. As U.S. investors investing in European fossil fuel companies increase, time zone differences and exchange rate fluctuations with the European market also pose weaknesses for European fossil fuel companies.
Investment bank Jefferies recently analyzed in a report that the price-to-earnings ratio (PER) of U.S. companies ExxonMobil and Chevron is more than one-third higher than that of their European competitors.
However, the realization of European oil giants listing on the U.S. stock market is considered practically impossible. This is because they would have to move their European headquarters to the U.S. It is expected that there will be strong opposition from governments and political circles, and there is also a risk of losing public support. When TotalEnergies’ plan to list on the U.S. stock market became known, Bruno Le Maire, France’s Minister of Finance, stated, “We will fight against TotalEnergies’ moves to prevent such a thing from happening.”
There is also speculation that European fossil fuel companies may be indirectly sending critical messages to governments and political circles.
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