Even as ExxonMobil sharply increases spending on shale this year, it has also prioritized one major project in particular—a drilling prospect off the coast of Guyana.
Algeria's president has called for the country to combat the “hegemony of fuel” in light of recent economic devastation.
Exxon and other oil majors are still giving the green light to a handful of complex and risky but potentially highly profitable projects offshore, while at the same time increasingly shifting more resources into safer, smaller-scale shale drilling.
Oil majors are now cash flow neutral with oil prices trading around $50 per barrel, a milestone achieved after relentless cuts to spending and payrolls over the past couple of years.
Third quarter earnings figures for the oil majors reveal a mixed picture for the industry: Companies are dealing with more debt, weaker refining margins, and deeper spending cuts, but they are also experiencing increased optimism that the worst might be over.
Exxon has dismissed the probes of its accounting practices as unwarranted and politically motivated, but they could mark a watershed moment for the oil and gas industry.
The oil majors are living off of yesterday’s discoveries, and choosing to pay shareholders at the expense of future growth.
The oil majors reported very dismal numbers for the first quarter, but earnings exceeded market expectations largely because of earnings from their downstream units: Refining operations have allowed the large integrated oil companies to weather low oil prices much better than upstream E&P companies.
If oil prices do not rebound substantially, the oil majors will not be able to keep up such high levels of spending and still offer shareholders such generous dividends.
Even though the oil market has risen considerably since February, bankruptcies, staff layoffs, capital expenditure cuts, and falling productivity continue to be commonplace during the price downturn that has so far lasted for seven straight quarters.