Shale Majs Cut Spending Amid Record Oil Prices
US shale majors are cutting their spending plans despite higher oil prices, according to Bloomberg. Companies like Chevron and ConocoPhillips reduced their spending by 10% over the first six months of this year.
The move is aimed at reducing debt and boosting shareholder returns, but it may slow down production growth in the US, which has been breaking records. The International Energy Agency predicts a global oil market deficit of 1.8 million barrels daily.
Drilling rig numbers are on the rise, with 43 rigs more than last year, but the spending cut may change this trend. Shale wells notoriously deplete faster than conventional ones, requiring more frequent drilling and fracking.
The industry has been shifting towards discipline and shareholder returns, which may be a structural change. Well depletion and productivity decline are also factors to consider, with estimates suggesting that well productivity in the shale patch had declined by 15% back in 2024.