Capex for Integrated Energy Companies in 1H17


Aug. 22 2017, Updated 6:36 a.m. ET

Capex for integrated energy companies

Let’s analyze capex (capital expenditure) for ExxonMobil (XOM), Chevron (CVX), Royal Dutch Shell (RDS.A), and BP (BP) by segment in the first half of 2017.

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Shell had the highest capex

Shell had the highest capex in the first half of 2017 at $9.9 billion, of which 76.0% was in the upstream segment and 24.0% was in the downstream segment. Shell is in the process of churning its upstream portfolio to retain only competitive assets. It recently began operations at P-66 FPSO (floating production storage and offloading) in the Lula South field in Brazil. The company is also in the process of buying Turritella FPSO. Schiehallion also began production recently. Shell expects its new projects that started since 2014 to contribute ~1.0 MMboepd (million barrels of oil equivalent per day) by 2018.

In 2Q17, Shell completed $8.0 billion of upstream divestments, including oil sands and in-situ stakes in Canada. Recently, Shell declared the sale of its interest in the Corrib gas venture.

Chevron’s capex in 1H17

Chevron spent $8.9 billion on capex in the first half of 2017. About 89.0% of that was in the upstream segment. Chevron continues to incur capex on its major upstream projects such as Gorgon and Wheatstone in Australia and other projects globally. In the quarter, Chevron had all three LNG (liquefied natural gas) trains, surpassing their capacity at Gorgon. Wheatstone’s platform also became operational with its Train 1 in a start-up phase. For 2017, Chevron foresees 4.0%–9.0% growth in its net hydrocarbon production because of new field start-ups and existing field ramp-ups, partially offset by maturing field declines.

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XOM and BP’s capex in 1H17

Comparatively, in the first half of 2017, XOM incurred capex of $8.0 billion, ~73.0% of which went toward its upstream segment. XOM has an integrated approach to capital spending. In its upstream segment, ExxonMobil took a final investment decision to develop the Liza field off the coast of Guyana. The field is anticipated to start production in 2020. The Liza Phase 1 is expected to produce around 120,000 boepd (barrels of oil per day). ExxonMobil predicts five major projects, which are supposed to add 0.34 million boepd of working interest capacity, to begin production in 2017 and 2018. These projects are Hebron in Canada, Barzan in Qatar, Upper Zakum in UAE (United Arab Emirates), Kaombo in Angola, and Odoptu 2 in Russia. Odoptu 2 and Hebron may start production in 4Q17.

BP’s organic capex for the first half of 2017 was $7.9 billion. BP has incurred 86.0% capex in the upstream segment. Three major upstream projects came online in the first half of the year. They were West Nile Delta (the Taurus and Libra fields), Trinidad Onshore Compression, and Quad 204. Also, projects such as Persephone in Australia and Juniper in Trinidad have recently started production. Mega projects such as Khazzan Phase 1 in Oman and Zohr in Egypt are well on track to achieve start-up in 2017.

BP plans to add around 1.0 MMboepd (million barrels of oil equivalent per day) of new production net to BP by 2021. Of that, around 800.0 Mboepd (thousand barrels of oil equivalent per day) is expected to be added by its key projects, and around 200.0 Mboepd is expected from new portfolio additions.


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