As oil prices soared, Buffett began to invest heavily in oil giants.
According to two documents disclosed by the US Securities and Exchange Commission (SEC), this year, Buffett's Berkshire Hathaway Inc. (hereinafter referred to as Berkshire) increased its holdings of more than 91 million ordinary shares of American energy giant Occidental Petroleum Corp. (hereinafter referred to as Occidental Petroleum).
Based on the closing price of Western oil of US $56.15 on March 4, the total value of these stocks exceeded US $5.1 billion (about RMB 32.225 billion).
According to the documents released by the US Securities and Exchange Commission on March 4 local time, as of March 1, Berkshire's total shareholding in Western oil reached 113.7 million shares, of which more than 29 million were common shares.
These ordinary shares should be purchased between January and March 1 this year. Berkshire's 13F position document released in February showed that the company did not hold shares of Western oil by the end of last year.
Berkshire also holds more than 83 million ordinary share warrants of western Petroleum, with an exercise price of $59.624. Warrants represent the right to purchase shares of the company at a specific price on a specific date.
These warrants mainly come from the return of Western oil's investment of US $10 billion in Buffett to help him acquire Anadarko Petroleum Corp. in 2019. At present, Berkshire has not exercised this part of the warrants.
In addition, according to the report submitted by Berkshire to the US Securities and Exchange Commission on March 4 local time, the company purchased more than 61 million western oil shares from March 2 to March 4, with a price ranging from $47.07 to $56.45 per share.
Affected by factors such as the escalation of the conflict between Russia and Ukraine, crude oil prices have been rising recently. On March 4, WTI's April crude oil futures closed up 7.44% to close at US $115.68/barrel, an eight year high, and rose 26.3% this week.
Due to the favorable factors of oil price, the share price of Western oil has increased by more than 90% this year. As of March 4, the closing price of Western oil was $56.15, up 17.59% in a single day.
Consulting firm oilx said that due to the sanctions imposed by the United States and European countries on Russia, the possibility of interruption of Russian offshore crude oil and refined oil supply is rising, or pushing the oil price above $150 a barrel. JPMorgan even predicted that the price of Brent crude oil could reach $185 a barrel by the end of the year.
This is not the only recent move by Buffett to bet on oil and gas assets.
According to Berkshire's latest position documents, Buffett increased his holdings of 9.54 million chevron shares in the fourth quarter of last year, with an increase of more than 30%. The increase also makes chevron one of Berkshire's top ten heavyweight stocks, with a total position of 38.2 million shares and a current market value of about $6 billion.
As of March 4, Chevron closed at $158.65, up more than 60% in the past six months and more than 30% this year.
Buffett also has huge natural gas assets. In July 2020, Berkshire announced the acquisition of natural gas business assets of dominion energy, with a transaction value of US $9.7 billion.
The assets acquired include 100% equity of dominin energy transportation company, Questar pipeline company and Carolina gas transportation company, 50% equity of Iroquois and 25% equity of Cove point LNG. Among them, Bay Point LNG has one of the only six LNG export terminals in the United States.
In addition to oil and gas assets, Buffett also invested in the new energy industry.
According to Bloomberg on January 20 this year, Berkshire plans to spend $3.9 billion on wind energy and Cecep Solar Energy Co.Ltd(000591) power generation projects to increase the proportion of clean electricity in Iowa. The project, called "wind prime", will contain 2042 megawatts of wind power and 50 megawatts of photovoltaic, and is expected to become one of the largest projects in the U.S. renewable energy industry.
Berkshire expects that if the project is successfully approved, the construction work will be completed by the end of 2024. The company also plans to fund technical research related to carbon capture, energy storage and small nuclear reactors.
At present, Buffett has three large-scale photovoltaic projects with a total installed capacity of 1819 MW.
In May 2020, the Gemini solar project invested by Buffett in the United States was approved for installation by the U.S. and Chinese ministries of government. Located in the north of Las Vegas, the project is expected to cost $1 billion and have an installed capacity of 690 MW.
The other two 100 MW photovoltaic power stations are located in California, namely "Topaz solar" project and " Cecep Solar Energy Co.Ltd(000591) star" project, with an installed capacity of 550 MW and 579 MW respectively.
