Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Sizing-up this Energy Goliath: Exxon Mobil Corporation (XOM), Chevron Corporation (CVX)

Threats:

Decline in US Oil Consumption: According to IEA’s World Energy Outlook 2012, global energy demand for oil is likely to grow by more than one-third to 2035. However, there will be around a 5 million barrels/day drop in US oil consumption by 2035, with respect to current levels. This might impact Exxon, as more than one-third of its revenue is generated from the US.

Intense Competition in Natural Gas Sector: Chevron Corporation (NYSE:CVX) can pose a great threat to Exxon in the natural gas sector. It has seven new projects lined up in this sector that are expected to come online during 2012-2013, and is projected to produce 115 million barrels of oil equivalent in 2013.

Government Regulations: The US Gulf of Mexico oil spill is likely to lead to stricter environmental rules and standards for deep water offshore drilling. This will ultimately increase the cost of projects in Gulf of Mexico, which is one of the regions were Exxon has projects.

Final Thought:

With a diversified business and plentiful resources to fuel its growth plans, Exxon’s long-term outlook is pretty bright. Although competitors and law-makers are breathing down its neck all the time, Exxon’s groundbreaking initiatives and aggressive expansion strategies keep it way ahead of the competition.

The article Sizing-up this Energy Goliath originally appeared on Fool.com and is written by Nikita Dugar.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.