Oil majors reverse decade of stalled growth to beat supply crunch fears
By Ron Bousso
HOUSTON (Reuters) - Oil majors have long been passive watchers of the pump war between OPEC and U.S. shale producers, but not any more.
Majors were unable to grow output for the past decade even as oil prices soared above $100 per barrel due bad capital discipline and huge project delays.
The oil price slump since 2014 has prompted the world's biggest oil firms to drastically cut costs but also to force contractors to make projects more efficient and extract the same amount of barrels for fewer dollars.
As a result, most majors are now planning exceptionally strong production growth until at least 2021, a Reuters analysis of the latest investor presentation and corporate plans showed.
Even as prices LCOc1CLc1 hold near $50 per barrel, the firms - Royal Dutch Shell Plc (RDSa.L: Quote), Exxon Mobil Corp (XOM.N: Quote), Chevron Corp (CVX.N: Quote), BP Plc (BP.L: Quote), Total SA (TOTF.PA: Quote), Statoil ASA (STL.OL: Quote) and Eni SpA (ENI.MI: Quote) - plan to grow output by a combined 15 percent in the next five years.
"This environment requires discipline on costs and strong operating performance. It will reward businesses that can remain highly competitive at these prices," BP's chief Bob Dudley said at the London-based company's strategy day last week.
The seven companies will add almost 3 million barrels per day to their combined output in the next five years effectively generating production the size of another major like Chevron.
The International Energy Agency on Monday warned that global oil supply may struggle to match demand after 2020 due to the sharp decline in investment in recent years. Continued...