Chevron Opposes U.S. Oil Bailouts Amid Shale-Patch Shutdowns

(Bloomberg) -- Chevron Corp. said it opposes U.S. government “bailouts” for oil companies that haven’t prepared themselves well enough for a historic crash in crude prices that’s leading to unprecedented shutdowns in the shale patch.

“As companies that have not positioned themselves in a way that would be prudent coming into a tough market, a bailout reinforces the moral hazard argument,” Chief Executive Officer Mike Wirth said Friday in a Bloomberg TV interview. “Market cycles are a part of our industry -- they always have been -- and we don’t need the government to come in and protect us from a part of our industry that we know and that we should prepare for.”

The Federal Reserve revamped its Main Street Lending Program Thursday in ways that will allow battered oil companies to qualify for the aid after industry allies lobbied the Trump administration for changes. For weeks, oil industry advocates have warned the original program structure would prevent beleaguered drillers from accessing capital under the program.

Wirth said, however, that certain programs for companies that have been well managed and now find themselves in a short-term squeeze could make sense.

“Anything should be measured, it should ensure the taxpayers are properly compensated for the use of the tax dollars and should be pretty limited in application and duration to really help through the most difficult times,” he said.

©2020 Bloomberg L.P.