After reporting record earnings in the second quarter of the year as a result of an increase in energy prices, the West’s energy titans are expected to return a record $30 billion to investors.
However, due to concerns about how the recession and climate change may affect the market for fossil fuels in the future, the major five Western oil and gas corporations have held off on putting a greater portion of their record combined profits—nearly $60 billion—into new production.
An energy supply shortage that has pushed inflation to multi-decade highs and sparked calls from citizens and opposition leaders for governments to raise taxes on energy companies may be made worse by customers’ unwillingness to spend.
In contrast to earlier cycles of high oil and gas prices, such the boom of the late 2000s that sparked brisk spending to raise production, the spending strategy encourages gradual spending increases.
“Given all the uncertainty in the world, now is not the time to lose discipline,” Bernard Looney, the chief executive of BP, said to Reuters.
According to projections by Reuters, the total oil and gas output of BP, Shell, TotalEnergies, Chevron, and Exxon in the first half of 2022 was 14.6 million barrels of oil equivalent per day (boed), around 10% less than it was before the epidemic.
While several of the businesses recently modestly boosted their 2022 spending projections, overall, they are still staying within their earlier target spending ranges. The majority of the additional funds are allocated to initiatives that can begin generating quickly or to push back the beginning dates of initiatives that are currently underway.
According to Chief Executive Officer Patrick Pouyanne, TotalEnergies increased its spending forecast for 2022 by $1 billion, to a range of $16 billion, in part to speed up field extensions in Angola.
According to Looney, BP is increasing spending by $500 million this year, mainly to grow short-term production in the Gulf of Mexico and the Hayensville onshore natural gas field in the United States.
However, BP will stick to its $14–$15 billion spending plan for 2022 and won’t compromise its goal of cutting oil and gas production by 40% by 2030 as part of Looney’s objective to switch to renewable and low-carbon energy sources. The oil and gas sector will account for almost two-thirds of BP’s budget in 2022.
Although the energy crisis brought on by the invasion of Ukraine by a major fossil fuel producer, Russia, has in the short term focused attention on countries using all available supplies, even if that means coal with a high carbon footprint, in the long run Western governments are working to transition to low-carbon energy.
According to the International Energy Agency, if the world wants to achieve net zero emissions by the middle of the century in an effort to slow climate change, investors shouldn’t support new oil, gas, and coal supply projects.

There has been a noticeable divergence among the top energy corporations, with Exxon, Chevron, and TotalEnergies planning to increase output over the next few years while BP and Shell want to maintain relatively level production.
Exxon anticipates that its production in 2022 will remain at 3.8 million boed from the previous year, but it intends to increase it to 4.2 million boed by 2027, with Guyana and U.S. shale accounting for the majority of the increase.
Chevron, which is spending extensively in Kazakhstan and the U.S. Permian basin, expects a 3 percent annual growth over the next five years to achieve above 3.5 million boed from its current 2.9 million boed.
Energy markets were already extremely constrained when demand resumed following pandemic lockdowns, which is in part to blame for this year’s spike in energy costs. Years of underinvestment contributed to this situation.
On February 24, shortly after the start of the invasion it describes as a “special military operation,” gas prices in Europe reached record highs and global benchmark crude reached levels not seen in 14 years.
The record $30 billion in shareholder returns compares to quarterly returns of between $16 to $20 billion before the epidemic, and they are expected to rise once again in the third quarter, primarily in the form of share buybacks.