Just wondering what you guys' thoughts were on the above.
Will they be successful or give up in a few years?
Can they really get anywhere near BP/Shell/Vitol etc?
Seems their culture is still very engineer orientated which can be both an advantage and disadvantage.
Wonder if anyone has any experience dealing with them. Couple old articles below
https://www.bloomberg.com/news/articles/2022-08-1…
https://www.bloomberg.com/news/articles/2023-07-0…
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lol
Ex-ExxonMobil employee here....they will never be able to compete in the long-term until the company culture dramatically shifts. Exxon in all of it's business lines runs an extremely conservative/risk-averse business model. They are also trying to build the trading org by poaching people from the shops you mentioned, where they are allowed relative autonomy with wider risk constraints. So you have a culture mismatch from day 1 that XOM tried solving by providing above average comp when you walk in the door, but the upside in the XOM machine is always limited.
Every couple years or so there is an article like this where XOM talks about their progress building out their trading org and the reality is they've been treading water for the last 10 years. Any time there is an aggressive money making opportunity, the red tape that has to be broken through to take advantage usually causes the opportunity to pass by if it's not just rejected by management anyway. Case in point, when crude went negative in April 2020, XOM had sufficient excess storage to get paid to take the delivery of product on that date, store for 24-48 hours, and then resell once the roll forward of the contract occurred....as close to a pure arbitrage opportunity that you'll ever find in the real world. But there was some archaic risk parameter that the trade violated so the XOM traders weren't given the approval to move on the idea and missed out on potentially tens of millions of dollars of profit. That team packed up and quit pretty soon after.
Thanks for the reply. Do you see the expansion causing a slight upgrade in their trading division but still getting nowhere near Shell/BP etc or do you think it will have little to no long-term impact on their division?
There is no "expansion" ... they hire people, said people get a taste of exxon's shitty way of operating, they quit. rinse and repeat.
I can give some context as well, was there for less than a year before leaving for a better opportunity.
The other poster is 100% right on the culture thing, ton of red tape and not a lot of risk appetite. You spend half the time fighting political battles/ making slide shows vs trying to generate PNL lol
I think the bigger piece then that is comp. They still don’t pay bonuses for traders. They have a pension program as incentive for people to stick around so after 10+ years you’re basically married to the firm but otherwise you can make much more money at any other shop that will pay a bonus
I knew they didn’t pay analyst bonuses, but no trader bonuses is crazy. How they expect to get anyone is beyond me.
From my understanding it’s not zero bonus, but it is in line with a traditional operations bonus. So the engineers that work in that business unit get the same bonus the traders do.
This business model is done for in this industry, there aren’t ‘company men’ anymore.
They started experimenting with bonuses as a % of book, but only for a very select few...could count them on 1 hand. Bonuses have a long vesting schedule (3 yrs for half, then an incremental 3-4 years after)....the $$ amount isnt really going to impress most in the industry
Nice to see people finally sharing truth about some of these firms vs the usual omg big game. Shell/BP are underpaying juniors relative to merchants now, and yes XOM is in a league of their own.
What do you mean by "omg big game"?
Whoops…name. People think cause XOM has 3bcf of prod a day they actually a big gorilla. Nope.
Think as a junior you can still join to get risk/ops experience, get a trading seat and experience and then leave for better pay. I know a number of people who entered fresh and then went to other places as traders.
When you're new it does not really matter where you are getting your experience since once you get a seat its easier to go to another seat then getting into a seat from a on trading role. I would say EM is now the training ground for other players to get younger guys from since they don't need to retrain them in the basics.
these articles make me laugh.... xom is a refinery... not a trade house
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