Major oil and gas companies worldwide have adopted a new approach since the historic oil price crisis in 2020, which severely impacted the energy industries. These companies, including ExxonMobil, Chevron, British Petroleum, Shell, and Total, have prioritized returning more liquidity to shareholders instead of expanding their operations. Over the past five years, these companies have collectively spent more than $100 billion annually in the form of dividends and share buybacks, which accounts for nearly 80% of their revenues.
Reduction in Capital Expenditures and Increase in Production
Despite these significant expenditures, companies have notably reduced their capital expenditures. According to an EY report, the capital expenditures of 30 major oil and gas companies in the United States decreased by 49% in 2025 compared to the previous year, reaching $4.8 billion. This amount constitutes only 3% of the total capital expenditures of this group. However, the oil production of these companies reached its highest historical level in 2025, and revenues also increased by 7%. This outcome indicates that the reduction in costs has not significantly impacted their profitability.
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Technology and Innovation in Increasing Efficiency
Major oil companies have successfully increased their production volume by utilizing improvements in drilling efficiency and technological advancements. New drilling techniques, including long horizontal drilling, allow these companies to use a single drilling rig to extract oil from multiple reservoir rocks. Additionally, by employing artificial intelligence and machine learning technologies, companies have been able to optimize production processes and reduce operational costs. These technologies help them accurately identify prolific locations using big data and achieve maximum oil recovery.
However, with the continuous reduction in capital expenditures, companies also face challenges. Some deepwater projects, such as ExxonMobil's projects in Guyana, require heavy initial investments. Meanwhile, the inventory of drilled but uncompleted wells in the United States has decreased to about 4,972 wells, the lowest level since 2013. This decline reflects producers' preference for completing previously drilled wells rather than deploying new rigs.
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