US-based oil majors Chevron and ExxonMobil have announced significant boosts to their planned investments in energy projects next year, as the global demand for oil continues to keep oil prices relatively high.
With both companies having cut their operating cuts in the wake of the COVID-19 pandemic, high oil prices have meant they are awash with cash, but sharp increases in shareholder returns have attracted criticism that they are not doing enough to increase oil production and bring down consumer prices.
Chevron announced that it plans to increase project investments from $15 billion this year to $17 billion next year, with this including adjustments for inflation and new money for projects to reduce emissions. ExxonMobil, which also makes industrial lubricants like the Mobil SHC gear oil, will increase its investments from an expected $22 billion this year to $23–25 billion next year. Projects for cleaner fuels with lower carbon emissions will also see greater funding.
Additional investment, of course, takes time to translate into higher production. While Chevron expects its production to increase by a compound average of 3% annually over the next few years, ExxonMobil forecasts that its oil production will remain at 3.7 million barrels of equivalent oil per day (boed) next year. Furthermore, the company now believes it will take an extra two years to meet its target of producing a million boed from its operations in the Permian Basin.