Oil & Energy

Big Oil Firms Now Ready To Boost Spending

Published

4 years ago

November 8, 2021

All five oil and gas supermajors are looking to boost capital spending in 2022.
Despite some of the big oil timesreporting strongest earnings in years and record cash flows, capital discipline remains a key pillar of Exxon, Chevron, Shell, BP, and TotalEnergies are set to increase their combined capex programs in 2022 by at least $12 billion.
All five international oil and gas majors expect to boost their capital spending next year, although capital discipline and higher returns to shareholders will remain the top priorities for ExxonMobil, Chevron, Shell, BP, and TotalEnergies.
Those oil majors—although Shell, BP, and TotalEnergies now prefer to be known as energy companies—have reported strong cash flows and earnings for the past two quarters as significantly higher oil and gas prices compared to last year boosted profits.
Despite some of Big Oil reporting strongest earnings in years and record cash flows, capital discipline remains a key pillar of all future strategies. Increased capex plans for 2022 and onwards are not surprising considering the fact that in 2020, all firms slashed as early as in March their capital allocation guidance in response to the crash in prices in the pandemic. Now budgets are slightly higher than in 2021 and incremental investments are specifically going to core growth oil and gas projects with low breakevens and high returns and to low-carbon energy.
Discipline Continues To Guide Spending
Despite $80 oil, no one is splurging on investment these days, unlike in the years prior to the 2015 price crash, when companies were spending as if oil would stay at $100 a barrel forever.
Sure, capex for 2022 is higher at all five majors compared to 2021 and 2020, but it’s nowhere near 2014 levels. Capital discipline is still the keyword in all earnings releases and calls, where higher dividends and share buybacks take precedence when it comes to allocating this year’s record cash flows.
Exxon, Chevron, Shell, BP, and TotalEnergies are set to increase their combined capex programs in 2022 by at least $12 billion, according to estimates from Energy Intelligence based on company reports and earnings calls.  The increases are much smaller than the surge in the cash flow and earnings this year as the majors are set to primarily use the windfall to reduce debt and increase shareholder returns by raising dividends and repurchasing stock.
Higher Low-Carbon Spending
The five largest international firms are also raising capital spending on low-carbon energy, including the U.S. supermajors who differ from their European competitors in strategy by not being willing to invest in any solar and wind power generation. Instead, Exxon and Chevron plan to focus on renewable fuels and carbon capture and storage (CCS), both to cut their own carbon footprint and to develop in partnership regional CCS hubs in heavily industrialized areas.
Chevron, for example, said in September that it would triple its planned capital investment in lower carbon businesses to $10 billion through 2028, including $2 billion to lower the carbon intensity of its operations. Exxon said last week it expects its cumulative low-carbon investments to be around $15 billion from 2022 through 2027, a fourfold increase in a plan to raise total capex by at least $4 billion in 2022 compared to 2021.
Exxon Plans Highest Capex Hike
In reporting blockbuster earnings for Q3 last week, ExxonMobil’s said its 2021 capital program is expected to be near the low end of the $16 billion to $19 billion range. In the fourth quarter, the board of directors will formally approve the corporate plan, with capital spending anticipated to be in the range of $20 billion to $25 billion annually. The higher investment is underpinned by further appraisals and developments in Guyana and Brazil, Kathy Mikells, Senior Vice President and Chief Financial Officer, said on the Q3 earnings call last week. The Permian remains a top priority as well, where “we’re seeing that work that we’re doing out in the Permian deliver the same value for a lot less spend,” CEO Darren Woods said.
The other majors also plan higher capex in coming years, although less than Exxon’s increase in spending.
Shell, for example, said in its strategy day in February that it would boost its cash capex to $23 billion-$27 billion per year, from $19-22 billion annually, when it brings net debt down to below $65 billion. The company did that in Q3, with net debt down by $8.2 billion to $57.5 billion, thanks to improved macroeconomic environment and commodity derivatives inflows.
Shell’s higher capex was contingent on reducing debt and increasing shareholder returns first.
TotalEnergies, which sees net investments in 2021 at $13 billion—including $3 billion on renewables and electricity—expects to keep investment discipline, with its capex program at $13-15 billion per year for 2022-2025, the French firm said in September in its strategy presentation.
Chevron, which lowered 2021 capex guidance to $12 billion-$13 billion, has guidance of $15 billion to $17 billion for 2022 through 2025, CFO Pierre Breber said on the Q3 earnings call on Friday after Chevron reported its biggest quarterly profit since 2013 and its highest free cash flow on record.
“We do expect higher capex in the fourth quarter and next year,” Breber said.
Despite higher spending guidance, Big Oil continues to be conservative in capital allocation now that shareholders want returns and ESG investors want accountability.
“US$80/bbl oil gives companies options, and a chance to do it all – return cash to shareholders, maintain oil and gas investment, and accelerate investment in low carbon opportunities. The current upcycle presents a golden opportunity to reposition for a very different future,” Kavita Jadhav, research director at Wood Mackenzie, said last month.
Paraskova Reports for Oilprice.com

Oil & Energy

Resource Wars Are Here and Oil Is the First Casualty

Published

2 days ago

March 30, 2026

The Tide

In just over a year, the world saw several instances of a choked supply of commodities indispensable for today’s economies and military capabilities.

From China’s restrictions on rare earths and critical minerals supply to the de facto closure of the Strait of Hormuz, policymakers and analysts began to realize that the control of oil, critical minerals, rare earths, and magnets is as important as building and maintaining stockpiles of advanced weapons. It also became clear that without these resources, defense and military capabilities could be weakened. The actual arms race goes hand in hand with the new battle for the resources that underpin economic, manufacturing, and advanced military development.

“Great-power competition has returned to basics: who controls the physical resources that modern economies and militaries run on,” Alice Gower, a partner at London-based political-risk advisory firm Azure Strategy, told the Wall Street Journal.

“Energy, critical minerals and industrial capacity are leverage, not just economic assets,” Gower added.

The war in the Middle East and the blockage at the Strait of Hormuz laid bare the reality of choked energy supply. The world’s most vital oil and LNG chokepoint, through which 20% of daily global trade flowed before the Iran war, has been essentially closed for most tanker traffic for more than three weeks.

The massive supply shock, the worst disruption in the oil market in history, showed that the world is dependent on energy resources, and that geography and actual physical supply matter. With so much oil and gas stranded in the Middle East, oil prices spiked to above $100 per barrel, natural gas prices in Europe doubled, and Asian spot LNG prices hit multi-year highs.

The precarious situation in the Middle East is reverberating across Asia, the region most dependent on oil and LNG supply from the Persian Gulf. Asian refiners pay sky-high premiums for non-Middle Eastern crude, many are considering cutting or have already cut processing rates, and countries have started to enact fuel-preserving measures, from four-day work weeks to bans on fuel exports.

In Europe, the gas refilling season will be the toughest yet, as Asia is outbidding Europe for spot LNG supply after Qatar’s LNG is effectively sidelined and full capacity may not return for up to five years following Iranian missile attacks last week.

Even the ‘energy independent’ United States, the world’s top oil producer, is not independent when it comes to global supply shocks of such magnitude.

The national average price of gasoline is approaching $4 per gallon nationwide, more than $1 a gallon compared to a month ago, before the start of the war.

Oil is a global resource, traded on a global market, and prices reflect fundamentals, although they have been driven by hectic trading activity on geopolitics in recent weeks. But the fundamentals show that there is no resource available to plug the gap that has opened in Middle Eastern supply. Producers are slashing output due to a lack of storage capacity, which further delays a rapid recovery in supply when this mess ends.

All this goes to show that whoever controls the Strait of Hormuz has enormous leverage on inflicting global economic pain.

While the world is focused on the Strait of Hormuz, the race for rare earths and critical minerals continues, with the U.S. and Western countries scrambling to dent China’s dominance.

Since China restricted exports of rare earth elements early in 2025, Western countries have raced to create mine-to-magnet supply chains to reduce dependence on Chinese supply in the key military and automotive industries.

China holds a 59% share of the mining of rare earths, 91% in refining, and a whopping 94% in magnet manufacturing, the International Energy Agency (IEA) estimates.

The U.S. has responded by taking stakes in minerals mining companies, the launch of a U.S. Strategic Critical Minerals Reserve, known as Project Vault, and is leading efforts to break the Chinese stronghold on the pricing of these minerals critical for the defense and auto industries and national security.

Chinese dominance could be eroded, but it would take years.

Still, rising neodymium-praseodymium (NdPr) supply from countries like the U.S. and Australia is set to reduce China’s market share to 69% by 2030 from 90% in 2024, Bloomberg Intelligence (BI) said in new research this month.

“We’re seeing a surge in rare-earth investment as modern technologies demand more critical materials,” said Jack Baxter, Global Metals & Mining Analyst at BI and co-author of the report.

“That said, we anticipate a significant shortfall in supply due to trade uncertainties, with lead times as long as 10 years to get new material out of the ground,” Baxter added.

“This will give pricing power to the few producers that currently are able to supply critical materials outside of China, fracturing the globalized market.”

Amid fractured markets and high geopolitical uncertainty, one thing is certain – the next arms race, alongside the actual arms race, will be for control of key resources such as oil and critical minerals.

By Tsvetana Paraskova

Oil & Energy

Transcorp Energy, Renewvia Partner On Renewable Energy Gap

Published

2 days ago

March 30, 2026

The Tide

Transcorp Energy Limited and Renewvia Solar Nigeria Limited have signed a Memorandum of Understanding to jointly develop renewable energy projects across Nigeria.

The move is aimed at addressing the persistent power deficit that has crumble businesses in the nation.

The agreement also outlines a longer-term plan to expand operations across Africa, positioning both firms to tap into growing demand for clean and reliable electricity.

The partnership would target commercial, industrial and residential consumers, as well as underserved communities, through a mix of off-grid and grid-connected energy solutions.

Beyond electricity provision, the collaboration would explore the aggregation and monetisation of Renewable Energy Credits generated from the projects, adding a commercial layer to the clean energy rollout.

The Managing Director and Chief Executive Officer, Transcorp Energy, Chris Ezeafulukwe, said the initiative aligns with the company’s broader strategy to expand access to sustainable power.

He noted that combining grid and decentralised energy systems would enable the company to deliver reliable electricity directly to end-users across different segments of the economy.

Chief Executive Officer of Renewvia, Trey Jarrard, described Nigeria as a critical market for the company’s African ambitions.

According to him, the partnership provides a platform to scale operations rapidly by leveraging established infrastructure and local expertise, while delivering cost-effective and resilient energy solutions.

Both companies said the agreement lays the foundation for a scalable pan-African renewable energy business, capable of supporting diverse markets and accelerating the continent’s transition to cleaner power sources.

The collaboration comes amid increasing pressure on governments and private sector players to deploy sustainable energy solutions to bridge electricity gaps, reduce reliance on fossil fuels, and support economic growth across Africa.

Oil & Energy

IYC Tasks Niger Delta Governors On Oil Field Bidding ….Decries Exclusion of Host Communities

Published

2 days ago

March 30, 2026

The Tide

The Ijaw Youth Council (IYC) Worldwide has raised concerns over the continued exclusion of host communities from the governance of oil resources, urging Niger Delta governors to take decisive steps by bidding for oil blocs and marginal fields.

The council warned that failure to act would allow external interests to continue dominating the region’s oil assets, despite their location within host communities.

Secretary-General of the council, Maobuye Nangi-Obu, started this at the stakeholders’ meeting organised by the Pipeline Infrastructure Nigeria Limited , with participants drawn from Rivers, Abia and Imo States, in Port Harcourt, recently.

“It is time for state governments in the Niger Delta, especially Rivers State, to form oil companies that can bid for marginal fields within their territories”, he said.

Nangi-Obu expressed concern over the reported listing of about 25 marginal oil fields for allocation, noting that many were located in host communities but allegedly being assigned to non-indigenes.

In his words “They sit in Abuja and decide what happens in our region, yet we are not part of the oil governance of our own resources”.

He explained that marginal fields, though considered uneconomical by major oil firms, remain viable for indigenous operators, adding that their allocation had continued to fuel grievances in the Niger Delta.

The IYC scribe also warned of the implications of directional drilling, describing it as a growing threat to host communities.

“There could be oil wells in your community, and somebody elsewhere could be drilling that oil without your knowledge,” he cautioned.

On environmental concerns, Nangi-Obu condemned the persistent gas flaring in the region, blaming both international and local operators for failing to invest in gas processing infrastructure.

He, however, commended Pipeline Infrastructure Nigeria Limited for its engagement with host communities.

“Pipeline Infrastructure Nigeria Limited is doing the right thing by engaging stakeholders. Not all companies are doing what they are doing,” he stated.

Traditional rulers at the meeting, further acknowledged improvements linked to the company’s activities in their areas.

The Eze Ekpeye-Logbo, King Kevin Anugwo, represented by Dr Patricia Ogbonnaya, noted that “aquatic life that disappeared due to pollution is gradually returning,” attributing the development to improved environmental conditions.

Similarly, Chairman of the K-Dere Council of Chiefs, Chief Batom Mitee, said, “There is now peace in our community,” stressing, increased oil production must translate into tangible benefits for host communities.

By: King Onunwor