Exxon Mobil Corp and Chevron Corp, the two biggest U.S. oil firms, have announced intentions to raise spending on energy projects in 2019 due to rising oil demand and prices.
Even if they will spend more, they will still spend less than half of the $84 billion they spent collectively in 2013, when oil prices frequently traded above $100 per barrel, as they have this year. The two are awash with cash from those prices and prior cost-cuts, and have dramatically upped shareholder rewards.
Pressure from the White House has been brought on by the emphasis on shareholder returns. Oil firms have been under fire from the Biden administration for not increasing their oil production in an effort to bring down consumer costs. The budgets for next year are still within the bounds that each had set before the conflict in Ukraine added to the world’s energy crisis.
Exxon announced that it would increase project investments from the expected $22 billion this year to between $23 and $25 billion next year. Chevron reported that it will spend $17 billion, an increase from roughly $15 billion this year. New funding for initiatives to reduce emissions and the effects of inflation are two examples of increases.
The increased spending won’t result in extra output right away. Exxon has predicted that production will remain flat at roughly 3.7 million barrels of equivalent oil per day (boed) in 2019, while Chevron forecasts it to rise by more than 3% year through 2026.
According to Exxon Chief Executive Darren Woods, the company will fall short of its goal of pumping 1 million boed from its Permian operations by about two years. Now, it wants to get to 900,000 to 1 million boed in 2027.
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