If there was any lingering doubt about what’s keeping Big Oil executives up at night, the fourth-quarter results cleared it up. It’s not slogans. It’s not transition optics. It’s whether they have enough high-quality barrels to avoid production decline in the 2030s.
The majors are refocusing hard on upstream portfolio renewal for the next decade, according to WoodMac, who analyzed Q4 data.
The near-term commodity backdrop isn’t exactly inspiring, and Brent looks soft. Refining margins are decent, petrochemicals less so. LNG is drifting toward what WoodMac sees as an oversupplied phase. Production growth from TotalEnergies, Equinor, Chevron, and ExxonMobil helped cushion earnings, but weaker prices are forcing a financial reset. Costs are being scrutinized. Capital budgets are under pressure.
Buybacks are the obvious casualty. After spending a combined $285 billion from 2022 to 2025 — roughly 18% of market cap — the majors are pulling back. Equinor and TotalEnergies are trimming repurchases. BP has halted them to accelerate deleveraging, targeting $9–10 billion in disposals to strengthen its balance sheet. The message: fix the finances first, then grow.
Growth, however, is the main event.
WoodMac argues that the level of urgency varies by company. The strategic goal is the same, though. Rebuild the upstream hopper. Shell has already been pressed on its thin post-2030 pipeline. The toolkit includes discovered resource opportunities, selective M&A, and a more assertive exploration program.
To prevent production from sliding in the 2030s, the majors need access to large, long-life resource bases now. That’s why certain countries are now back in focus.
Libya is critical because it offers existing, conventional barrels with scale. TotalEnergies and ConocoPhillips locking in 25-year contract extensions there, as well as Chevron’s entrance, is about securing durable production capacity for the next decade and beyond. Iraq offers similar benefits: big, conventional resource potential that can materially move the needle.
Venezuela is different. The reserves are massive, but the economics are tougher. On current fiscal terms, new projects would need roughly $80 per barrel to break even, according to WoodMac’s view, based on current fiscal terms. That makes it less attractive unless prices cooperate or contract terms improve.
At the same time, companies are debating how to rebuild their portfolios. One route is acquisitions, but high-quality upstream assets are expensive in today’s market. Chevron, having just absorbed Hess, and ExxonMobil are signaling they’re more focused on executing and developing what they already own rather than pursuing another major deal. ConocoPhillips has been explicit: it isn’t interested in M&A and plans to grow free cash flow through cost discipline and bringing projects online.
The underlying point is that oil majors see a production gap forming later in the decade. They’re now lining up access to long-life barrels — whether through contract extensions, selective country re-entry, disciplined development, or exploration — to make sure that gap doesn’t turn into decline.
By Julianne Geiger for Oilprice.com
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