Liam Denning, Columnist

Oil Majors Flush With Cash Have Changed Their Spending Priorities

Companies used to reinvest $3 or $4 for every dollar of dividends and buybacks, but the balance is now even.

February 10, 2023 at 1:29 PM UTC

Liam Denning is a Bloomberg Opinion columnist covering energy. A former banker, he edited the Wall Street Journal’s Heard on the Street column and wrote the Financial Times’s Lex column.

Profits are booming, yet the majors will produce less oil and gas in 2023 than 15 years ago.
Photographer: Tim Rue/Bloomberg

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Hello and welcome to Elements, our daily energy and commodities newsletter. Today, Bloomberg Opinion’s Liam Denning considers the world's oil majors, finally flush with cash but not going all-out to reinvest it. Meanwhile, crude prices have taken a leg up after Russia said it will slash output next month. If you haven’t yet signed up to get Elements sent to your inbox, you can do that here.

It says something that an oil major leaning in these days means cutting production by only a quarter. BP Plc is something of an outlier among peers. But its course change — shrinking the scope of planned declines in output this decade — was at least in keeping with the broad message of earnings season: With profits booming, investment in oil and gas is going up.