Oil Majors longer term - stock holding

[RichTT]

A lot of the oil majors are transitioning to a different strategy, becoming energy providers / facilitators and moving away from traditional oil (and to a lesser extent gas) revenue streams. Shell and Total have been buying electric charging networks and investing in renewable projects.

Looking at the following:

Shell - 5yr timeframe - High 31.09 - Low 10.46
BP - 5yr timeframe - High 588.50 - Low 199.86
Total - 5yr timeframe - High 55.84 - Low 25.00

I have circa 20k in shares, that are down from 30k about a year ago. Taking into account dividends is it actually worthwhile for me to sell them or hold? I could take them out and drip feed into a growth factored S&S ISA that's gaining on average 6.6% per year.

Is the stigma of being an oil and gas major going to suppress the companies even if they invest in renewable tech or do we think they are a good hold longer term? Is now the time to buy in at a low cost?

These are the only shares that I hold independently outside of an ISA wrapper.

[xeny]

RichTT said:

These are the only shares that I hold independently outside of an ISA wrapper.

flip the question around a bit - when did you buy them, and why did you choose to buy them?

Is there a reason they're outside a wrapper, or did you simply run out of ISA allowance?

[RichTT]

Was trying to be a bit circumspect, but I do work for one of the majors and as such they were share options bought at a 20% discount over the last ±7 years. The question is, do I take what I can, when I can, tax free and re-invest in growth tracker ISA? Or hold out for the longer term?

[GT03ROB]

RichTT said:

Was trying to be a bit circumspect, but I do work for one of the majors and as such they were share options bought at a 20% discount over the last ±7 years. The question is, do I take what I can, when I can, tax free and re-invest in growth tracker ISA? Or hold out for the longer term?

If you didn’t currently hold them would you be buying them now?

The oil majors are not leaving the oil & gas business anytime soon, but they are as you say diversifying. If they are successful in this no reason to suppose they wont continue to be good. However I will qualify that with the fact there need to be a significant shift in thinking & culture in the oil majors to be successful in these new areas.

[xeny]

RichTT said:

Was trying to be a bit circumspect, but I do work for one of the majors and as such they were share options bought at a 20% discount over the last ±7 years. The question is, do I take what I can, when I can, tax free and re-invest in growth tracker ISA? Or hold out for the longer term?

Should have twigged - I'd hold them for the term the scheme requires, and then sell them. You're essentially concentrating risk by investing in the field you work in. Something bad for the share price is potentially bad for job security for example.

[VR99]

GT03ROB said:

The oil majors are not leaving the oil & gas business anytime soon, but they are as you say diversifying. If they are successful in this no reason to suppose they wont continue to be good. However I will qualify that with the fact there need to be a significant shift in thinking & culture in the oil majors to be successful in these new areas.

It's been a challenging period for the oil majors with the pandemic and especially recently for the supply & trading companies with market volatility, depressed oil prices/lower demand for oil.
Then you have the focus on ESG which has been gaining momentum...so I guess their future success will be (in part at least) on how well they can diversify and adapt. If you (referring to Op) think they can navigate the upcoming challenges successfully then might be worth holding on but if not ....

Edited by VR99 on Sunday 31st January 11:13

[RichTT]

Its an odd situation with SIP schemes. For the largest 2/3 of the shares I only paid 5k or thereabouts. It's currently worth 19.5k an I can take about 10k of that tax free. You could say that I've quadrupled my investment. The rest are locked to either 2022 or 2024 depending and were bought with the price discount.

I get reasonable dividends still and the share price is low and 'recovering'. I have the option to buy in with a 20% discount in May and might just considering doubling down and holding on for the longer term. I hadn't actually spent too much time looking at the performance and original buy in costs as well as details on the dividends.