According to Norway-based Rystad Energy, oil majors that historically have been known as lavish spenders have reined in their appetites of late. Free cash flow from upstream operations among the majors increased to $121 billion last year, a vast rise from the $35 billion recorded in 2020. Increased oil and gas prices were among the main drivers of this surge.
“All of the majors experienced a substantial recovery in upstream profitability last year, with US giant ExxonMobil and Anglo-Dutch major Shell seeing the largest increase in absolute terms, at $20 billion and $18 billion, respectively,” Rystad Energy said in a May 2022 Upstream Report seen by OilNOW.
The energy research and business intelligence company said US player Chevron was not far behind, with estimated growth of $16 billion, followed by UK major BP and Norwegian state-controlled player Equinor, up by $11 billion and $8 billion, respectively.
“Upstream investment among the majors has remained conservative over the past two years and huge levels of profit did not translate into any increased investment,” Rystad Energy said. “In total, the peer group invested $57 billion last year in the upstream sector, $7 billion below 2020.”
But in Guyana, Exxon’s investment continues to be robust with the company sanctioning its largest project to date this year at the Stabroek Block. The Yellowtail Development is valued at US$10 billion and is set to add 250,000 barrels of oil per day (bpd) to the country’s output when it comes onstream in 2025/26. This will see total production surpassing 800,000 bpd.
Additionally, Exxon has been ramping up exploration operations at Stabroek Block, already delivering five new discoveries this year, with multiple campaigns currently ongoing in a bid to hit more pay.
So far, the company has found close to 11 billion barrels of oil equivalent on the block, spanning over 30 discoveries since 2015.