Oil & Energy

Big Oil Firms Now Ready To Boost Spending

Published

5 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

Can Cheap Batteries Deliver COP31’s 35% Electrification Goal?

Published

5 days ago

November 9, 2026

The Tide

Electrification will be the major focus of the COP31 United Nations climate conference, to hold in Antalya, Türkiye, from today, November 9 to 20, 2026. The host country will invite the attending nations to sign onto a voluntary pledge to reach 35 percent electrification on a global level by 2035. J

ust a year ago, this target may have seemed overly ambitious, but now, experts say that a number of factors, including volatile oil and gas markets stemming from the war in Iran, paired with enormous advances in clean energy technologies, have put that goal within “striking distance.”

The months-long closure of the Strait of Hormuz has catalyzed the clean energy transition and the rate of electrification around the world. Before the United States and Israel began their military offensive in Iran back in February of this year, one fifth of the world’s oil and gas trade flowed through the Strait of Hormuz. Its abrupt closure therefore sent global oil and gas markets into turmoil and sent energy-importing countries around the world scrambling for alternatives, especially ones that they could produce and control on their home soil. And, just like that, renewable energy became the new face of energy security.

“Wind and solar cannot be embargoed, blockaded, or shut off by a foreign power,” David Frykman, General Partner at Stockholm-based venture capital group Norrsken, wrote in an op-ed for Fortune earlier this year. “Every terawatt-hour of domestic renewable generation is a terawatt-hour that no adversary can weaponize.”

But there is another, quieter force that has made this rapid global pivot toward renewable energies possible – the energy storage boom. Energy storage is critical to ensure grid stability in the face of rapid electrification and the increasing representation of intermittent energy sources like wind and solar power in national energy mixes. Major advances in the sector in recent years have made battery storage more affordable and more scalable than ever before – just in time for the world’s most recent bout of ‘fossilflation.’

“What’s really become a game-changer in the past two years is the rapid deployment of large-scale batteries that can hang onto ever larger amounts of power to be used throughout the day to smooth out demand and avoid overtaxing the grid,” Forbes wrote in a Monday report.

The second quarter of this year saw the United States’ largest-ever energy storage expansion, at 20.2 gigawatt-hours of additional capacity, according to a report by the Solar Energy Industries Association and Benchmark Mineral Intelligence. That puts this year’s total additions at 30.8 GWh – and counting.

“Although President Trump is no fan of renewable energy or batteries, utility-scale energy storage capacity still nearly doubled to 165 GWh from 88 GWh in the first 18 months of his administration,” the Forbes article goes on to detail. “Grid operators, utilities and data center developers are all buying batteries as fast as they can to meet power demand and improve grid reliability. As a result, battery energy storage systems supplied more electricity to the grid in the year’s first eight months than in all of 2025.”

Ironically, despite his best efforts, Donald Trump is overseeing one of the United States’ most significant clean energy booms in the nation’s history as solar and wind have simply become too cheap to fail. And the United States is not alone. Buoyed by a flood of cheap solar panels and battery storage systems coming out of China, even the world’s poorest countries are experiencing clean energy revolutions.

“Some countries are pulling off stunningly fast energy transitions, adding solar so rapidly, it’s become a major source of electricity over the course of years — not decades,” reports CNN.

Pakistan has become the surprise poster child of this trend as residents install rooftop solar and batteries faster than any other market on Earth, as these systems provide electricity more cheaply and reliably than the country’s own beleaguered energy infrastructure. In addition, emerging economies including Brazil, Chile, El Salvador, Morocco, Kenya, and Namibia have all overtaken the United States – the world’s largest economy – in their clean energy transitions.

By Haley Zaremba

Oil & Energy

MAN, Ministry Tackle High Electricity Costs, Erratic Supply

Published

5 days ago

November 9, 2026

The Tide

The Manufacturers Association of Nigeria has said it is working with the Federal Ministry of Power to address high electricity tariffs, unreliable grid supply and rising energy costs that are undermining industrial production and competitiveness in the country.

The association said the collaboration would focus on developing sustainable energy solutions for manufacturers, including renewable energy, battery storage, captive power generation and improved electricity distribution.

Speaking during the second edition of the Manufacturers Energy Security and Energy Efficiency Summit in Lagos, the President, MAN, Dr. Ifeanyi Okoye, regretted that high electricity tariffs, unreliable grid supply and heavy dependence on fossil fuels had made industrial production exceptionally difficult.

Okoye said energy expenses consumed nearly half of some factories’ operating budgets, weakening their competitiveness, increasing product prices and threatening jobs.

He said manufacturers had continued to operate their own power infrastructure despite paying for electricity from the national grid.

“When energy expenses claim nearly half of a factory’s operating budget, competitiveness evaporates, retail prices skyrocket, and jobs are placed on the line,” he said.

Okoye said the association was moving beyond advocacy to implement practical solutions through its Industrial Energy Cost Reduction and Energy Support Programme, as key partners in delivering the initiative.

According to him, the programme would promote factory-roof solar installations, battery energy storage systems, captive natural gas generation and smart energy management networks to reduce production costs and protect manufacturers from global fuel price shocks.

He, however, stressed that manufacturers needed affordable, long-term financing to undertake the energy transition.

“We cannot finance 21st-century industrial transitions with 30-day commercial bank loans at cut-throat interest rates,” Okoye said.

He said the summit would bring financial institutions, climate funds and green investors together to develop long-tenured, low-interest financing instruments, carbon credit opportunities and asset-financing

Also speaking, the Minister of Power, Joseph Tegbe, warned industrial customers against unauthorised electricity connections.

He disclosed that investigations had uncovered about 14 industrial customers along a particular corridor who owed more than N400m in unpaid electricity charges over several years.

Tegbe said such practices deprived the electricity sector of revenue needed to sustain power supply and unfairly burdened consumers who paid their bills.

“Such conduct deprives the sector of revenue that we need to sustain the supply, and unfairly burdens consumers who pay honestly,” Tegbe said.

The minister vowed to recover the outstanding charges and hold those responsible accountable, urging MAN to encourage its members to maintain lawful electricity connections and comply with applicable regulations.

Tegbe acknowledged that manufacturers continued to struggle with electricity interruptions, poor power quality, vandalism and electricity theft, adding that the government was directing investments towards addressing the underlying problems.

Speaking on behalf of manufacturers, the MAN South-East Chairman, Ada Chukwudozie, said energy had become a question of survival and competitiveness for Nigerian manufacturers.

She said manufacturers were increasingly financing and managing their own electricity infrastructure while struggling with rising production costs and limited access to capital.

“We are effectively running a second power system paid for by ourselves, besides the grid we also pay for. And that is why for the Nigerian manufacturer, energy is no longer simply an operational issue. It is a question of survival and competitiveness,” Chukwudozie said.

She explained that unreliable electricity supply forced manufacturers to make difficult choices between purchasing energy and raw materials, maintaining equipment and paying workers.

The regulator added that manufacturers could strengthen their competitiveness by adopting cleaner energy sources as international markets increasingly imposed environmental and carbon-related requirements on products and supply chains.

Oil & Energy

Reps Panel Dismisses Petition Against NIPCO gas Licence

Published

5 days ago

November 9, 2026

The Tide

The House of Representatives has dismissed a petition seeking the cancellation of gas distribution licences awarded to NIPCO Plc, ruling that the petitioners failed to provide credible evidence to substantiate their allegations.

The decision followed a review by the House Sub-Committee on the Petition concerning NIPCO Plc, which rejected the complaint filed by the Nigerian Energy Security Watch Group (NESWG) for lacking substance and evidential support.

The petition had called for an investigation into, and the suspension and cancellation of, gas distribution licences issued by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to NIPCO for Lagos, Ogun, Oyo and Osun states, as well as the Lagos and Lekki Free Trade Zones.

Announcing the decision last Thursday, the Chairman of the Sub-Committee, Peter Aniekwe, said the petitioners relied on hearsay and failed to establish any wrongdoing in the licensing process.

“At its sitting today, the Sub-Committee resolved not to proceed with the investigation, and the petition is accordingly dismissed,” Aniekwe said.

The committee, which also includes Dahaltu Shehu, was constituted in October to examine the petition. It was granted an additional 14 days on October 26 to conclude its assignment.

Aniekwe said the issuance and regulation of gas distribution licences were statutory responsibilities of the NMDPRA under the Petroleum Industry Act, while stressing that the National Assembly would continue to exercise oversight over the process.

He disclosed that the regulator had committed to completing and rolling out gas distribution licensing in the fourth quarter of 2026, adding that the committee would monitor the implementation.

“Nigerians deserve a gas market that is open, competitive and safe, and investors deserve rules that are clear and stable,” he said.

The lawmaker reaffirmed the House’s commitment to considering petitions from individuals and organisations with genuine concerns about the petroleum sector, saying “each complaint would be assessed on its merits”.