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Oil Majors Ask for More State Assistance in Alaskan LNG Project

Exxon Mobil Corporation (NYSE:XOM), BP plc (ADR) (NYSE:BP), and ConocoPhillips (NYSE:COP) are trending after the three companies, who are major partners in the ~$45 billion Alaska LNG project, told the Alaskan government that they will not proceed with the LNG project as currently structured. Due to the LNG glut caused by slowing Asian economies and the low LNG futures prices due to weak crude prices, the project is not economically viable despite the energy companies’ best efforts at cutting costs. The three companies would like the project’s fourth partner, the state of Alaska, to play a bigger role. If the project were fully owned by the state and received tax-exempt status, the Alaskan LNG project would likely receive the green light. Another alternative to push the project past the finish line would be for the state/and the three companies to find big investors who might be willing to accept lower returns on capital such as pension funds. Among the investors in our database, 60 funds owned $3.02 billion worth of Exxon Mobil Corporation (NYSE:XOM)’s stock, 43 funds had a bullish position in ConocoPhillips (NYSE:COP), and 40 funds reported long positions in BP plc (ADR) (NYSE:BP) as of the end of June.

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Disclosure: none

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