Although the investment represents just 0.9% of Houston-based Exxon’s shares, analysts said it reflects strong support by the second-richest American of one of the world’s largest and most profitable companies.
In June, Berkshire Hathaway announced it had taken a $500-million stake in Suncor Energy Inc., Canada’s largest integrated operator and major oil sands company. Exxon also has sizable exposure to Canada with a 70% stake in Imperial Oil Ltd., another major oil sands operator in Canada. The deal gives the Oracle of Omaha exposure to growing oil markets across a number of hot oil markets such as U.S. shale, the Canadian oil sands, Kurdistan and Russia, among others.
“When Warren Buffett gives his seal of approval to any company, that is never a bad thing,” said Pavel Molchanov, energy analyst at Raymond James & Associates, who rates Exxon shares a “strong buy.”