Big-oil-companies will be worth very little in 30 years

If you’re looking for an extremely long-term stock pick from billionaire Bill Gates, it is to avoid Big Oil companies. At present the world is moving away from fossil fuels and adopting more clean and renewable energy sources, oil giants that have dominated markets for more than a century could be in trouble, the Microsoft co-founder said in a briefing at the COP26 climate summit in Glasgow, Scotland.

Bill Gates sees a role for Big Oil companies and their skill sets in the transition to clean energy but doesn't think all the incumbents will be left standing. Gates further said, cautioned against assuming "new eras are marked by the falling of giants," but added: A few of the big guys I think will make the transition and going further, some of these giants will fall, 30 years from now, some of those oil companies will be worth very little.

Sighting example, the companies like ExxonMobil, BP and Royal Dutch Shell all have seen their stock prices decline over the past five years - especially at the onset of the Covid-19 pandemic, which crippled demand for oil and resulted in huge losses for even the biggest oil and gas companies. ExxonMobil, the largest oil and gas producer in the U.S., lost $20 billion last year. The company still sports a market value of $275 billion - but countries like the U.S. shift their energy policies to fight climate change, and the automotive industry moves toward an electric future, investors are becoming increasingly dubious about the future of oil stocks.

Gates has emphasised, a number of oil majors - led by the European giants - have been diversifying into areas like renewables and EV charging and hydrogen, though oil and gas remain their dominant business lines. Gates sees potential in areas like "blue" hydrogen and also noted, "we have a pipeline infrastructure in the United States that probably can be retrofitted to transmit hydrogen."