Oil & Gas

Europe's major oil companies are considering delisting from European stock exchanges and listing on American exchanges. Total Energies' CEO, Patrick Pouyanné, has announced serious consideration of a primary listing in New York. However, Total Energies' unique business composition poses challenges for a move to the U.S. Last month, we reported on numerous struggling solar companies in Europe planning to relocate to the United States due to fierce competition from Chinese manufacturers and favorable U.S. policies. For example, Swiss solar module maker Meyer Burger plans to cease panel production in Germany and move to the United States. Similarly, Norway’s Freyr Battery has halted work at a half-finished plant near the Arctic Circle and intends to relocate to the U.S. Another trend emerging is European oil companies expressing ambitions to delist from European exchanges and list on American ones.

Total Energies' CEO has stated that the company is seriously considering a primary listing in New York, noting a significant portion of its institutional and global shareholders are in the U.S., making a New York listing appealing. Large European oil and gas companies have long felt undervalued compared to their American counterparts due to lower investor interest in fossil fuels in Europe. A listing of Total Energies on the New York Stock Exchange would be one of the highest-profile European companies to move to the U.S. for a listing venue. However, such a move would be challenging and potentially fruitless, as Total Energies' strong existing U.S. investor base already has ample access to its shares. Additionally, being listed on the S&P 500, which could boost its shares, is complicated by the requirement that companies be domiciled in the United States.

Total Energies' unique business mix, with a large employee base in France and a relatively small revenue share from North America, makes relocation to the U.S. challenging. Moreover, the logistics of its expanding electricity unit, a key part of its green-energy strategy, would be difficult to manage in the U.S. Total Energies has set ambitious targets for renewable production, which further complicates a potential move. Shell is also seeking a U.S. listing, citing undervaluation in London. European energy companies, including Shell and Total Energies, have traditionally traded at a discount to their American peers, a gap that has widened in recent years. Different business strategies, such as Shell's focus on renewable energy and Exxon's oil production growth, contribute to this valuation gap. Europe’s Big Oil faces pressure to invest in renewables due to higher climate activism in Europe compared to the U.S.