Power Line: $2 billion for clean energy — Schlumberger job offers disappear — 22 top energy stocks

Jeff Bezos, the founder and CEO of AmazonDavid Ryder/Getty Images

Welcome to Power Line, a weekly energy newsletter brought to you by Business Insider.

Here's what you need to know:

We're almost in July, which means I've started planning my 30th birthday. I've thrown out dreams of a densely packed NYC dance floor and replaced them with a day trip to find otters in the rivers of Eastern Iowa. Those are the same, right? Advertisement

We skipped last week because Insider Inc. was closed in honor of Juneteenth. Next week, we have an exciting feature coming out — the rising stars of clean energy. Stay tuned.

Now, let's get to it.

Investors are throwing money at clean energy as spending in oil and gas wanes

On Tuesday, Amazon announced a new $2 billion VC fund dedicated to technologies that reduce the impact of climate change, such as energy storage and electric transportation.
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  • "Companies from around the world of all sizes and stages will be considered, from pre-product startups to well-established enterprises," Jeff Bezos, Amazon's founder and CEO, said in a public statement.
  • The Seattle-based behemoth — which is worth more than $1.3 trillion in today's market value — didn't specify over what time frame the "initial" $2 billion would be dished out.
  • The announcement follows criticism of the firm's environmental record.

Read more: Batteries, fusion, and hydropower: Meet the 24 clean-energy startups that Bill Gates is backing

A broader trend: Amazon's new fund widens a growing stream of money emptying into the clean-energy industry.
  • In February, Jeff Bezos, himself, said he would spend $10 billion to address climate change through an initiative called the Bezos Earth Fund.
  • In January, Microsoft committed $1 billion to carbon capture and removal technologies.
  • The investment firm Generate Capital raised $1 billion for clean energy.
  • Sequoia Capital hinted it's now investing in climate tech.
  • A nonprofit called Prime Coalition recently closed a new $50 million fund that will channel investment into early-stage clean-energy startups
  • … to name a few!
Oil and gas faces a different reality: New clean-energy investment heavily contrasts what's happening in the oil and gas industry.Advertisement

  • Global spending on oil exploration and production is poised to fall to $383 billion this year, the lowest level in 15 years, according to a new analysis by Rystad Energy.
  • About 125 exploration and production companies have indicated that they're cutting spending, Rystad said.
  • The research firm said spending would stay pretty much flat next year.
  • Shale is among the oil classes that will be hit the hardest, Rystad says.

Flashback: As we previously reported, private equity investors, who fueled the US shale revolution with $125 billion, are facing a reckoning.

  • Small- and medium-sized PE firms focused on oil and gas will struggle to raise new funds in the future, experts told us.
  • Roughly 80% of the 500 or so PE-backed shale firms in North America will struggle to find buyers, one investor said. Exits are traditionally how PE firms recoup their investment.

The exterior of a Schlumberger Corporation building is pictured in West HoustonReuters

'We have taken the difficult decision to rescind your job offer': Cheap oil evaporates new Schlumberger jobs

Price check: US crude oil opened this morning just under $40 a barrel. That's double where it was at the start of May, but it's still down more than 35% since the start of the year. Advertisement

Oilfield services (OFS) companies — which provide drilling tech and services — are among the companies most exposed to low oil prices.

  • There are just 189 active drill rigs across the US, down 72% since March, Bloomberg reported.
  • Almost 2 million barrels of oil per day have been taken out of production in that same period. The US was producing a record 13 million barrels per day in February.

Schlumberger reacts: Schlumberger is the largest OFS company in the world, with a market value of more than $24 billion, but that doesn't mean it's immune to cheap oil. Since the pandemic took root, the firm has laid off workers, cut pay, and rescinded job and internship offers.

  • Scores of fresh college graduates had their job offers rescinded including international students who are now racing to find new positions that will allow them to stay in the country.
  • "Schlumberger's activity and outlook has been negatively impacted by two unforeseen events: decline in oil price and the impact of COVID-19," the company wrote in a letter to a student whose offer was revoked. "Unfortunately, we have taken the difficult decision to rescind your job offer."
  • Schlumberger has laid off about 2,000 people this year, according to the Houston Chronicle.
  • In April, the firm also implemented two furlough programs for its North American staff and cut pay for some workers, according to letters we obtained.
In other news: "A woman who worked as [a] field engineer at Schlumberger has sued the oil-field services company for $100 million, alleging pervasive sexual harassment and a workplace culture that accepted it," the Houston Chronicle reports. Advertisement

Has your career in the energy industry been impacted by the oil price downturn? Please reach out to me at bjones@businessinsider.com.

Goldman Sachs: 22 energy stocks worth buying as oil trends up

Analysts at Goldman Sachs say oil markets, while still down, are entering the next leg of the recovery. That bodes well for a handful of stocks in each segment of the energy industry.

  • The bank favors utilities and expects the sector, as a whole, to perform well over the next year.
  • On the flip side, the analysts are more hesitant to invest in companies that refine crude oil into products like fuel.
  • The bank says that fuel demand is expected to recover, but it adds that "absolute gasoline demand in the US peaked in 2018."
You can see all 22 of the bank's top picks here, across refiners, oil majors, utilities, midstream, and exploration and production. Advertisement

This week's top stories

  • Oil majors: The London-based oil giant BP said it's "writing down as much as $17.5 billion of its assets and might leave some of its oil and gas in the ground because of lower energy prices and weakened demand," the Wall Street Journal reports.
  • Racial disparities: "Black renters and homeowners face substantially higher residential energy costs than white residents, and these persistent differences are present almost throughout the income scale," Axios reports.
  • Solar: Sunrun, the nation's leading rooftop solar installer, is working with utilities to aggregate power from batteries across its customer base in an effort to create virtual power plants, Greentech Media reports.
  • Wind: The CEO of Ørsted, one of the world's largest wind energy companies based in Denmark, is stepping down after eight years leading the company, Reuters reports.

That's it! Have a great weekend.

- Benji Ps. Here's a lil robin family on my porch that does not give a damn about anti-bird spikes. Advertisement

Spikes are whatever for these robins.Benji Jones

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