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Can Shareholders Anticipate a Pot of Gold from the Oil Majors?

By Gerard Kreeft

All of the oil majors— Repsol, BP, Shell, ENI, TOTALEnergies, Chevron, ExxonMobil and Equinor—are enjoying their highest earnings ever. Is the message from shareholders: do not tamper with our cash machine?

In spite of increased dividends and stock buyback programmes by oil majors, their share prices have shown mixed results. In the period 2018-2022, US oil giants Chevron and ExxonMobil have seen their share prices flourish: Chevron up 39% and ExxonMobil 26%. European oil stocks have floundered: Repsol down 5%, BP down 19%, Shell down 17%, ENI down 17%, TOTALEnergies up 7%. Only Equinor was up 57%.

In the period January-March 2023 their stock market prices have not changed.

In the same period (January 2018-December 2022) the Dow Jones Industrial Index rose 31%: increasing from 25,295 to 33,147.

Table 1: Stock market prices of  majors 2018-2022(NYSE)




Note: Values based on January  2018 and December 2022

Why is it that the share prices of Chevron and ExxonMobil have performed so well and their European counterparts have done so poorly (with the exception of Equinor)?

The message from the investor community is the clarity of the message. Chevron and ExxonMobil have as their mainstay–the production of hydrocarbons and this is the message that is preached. New energy policies including CCS (Carbon Capture and Storage) and other new energy initiatives make up only between 15-20% of their capital budgets. In the case of Chevron some $3Billion per year based on a capital budget of $15-$17Billion; ExxonMobil’s new energy comes in at $3Billion per year based on a capex of $23- $25Billion. The message is clear and simple: we are oil companies pure and simple. Done in the good tradition of John D. Rockefeller, the spiritual father of both companies.

European oil giants, have seen their dualism—wanting to maintain their green image and also  profiting from the oil bonanza—fall out of favour by company shareholders. Their clarity of messaging has been found wanting.   The sole exception is Equinor who has stated that the majority of its capex budget will be from renewables by 2030.

The Message from BP

For 2022, BP posted  a profit of $27.7Billion( underlying replacement cost profit). In the period 2018-2022, BP shares were down 19%.

A key component of BP’s original green strategy  was to build an investment structure, which would require only a few skilled accountants. The company sacked employees or was preparing delegating BP’s headcount to its joint ventures. The goal was to become lean and mean, reducing costs and, hopefully, increasing margins. In short becoming an investment vehicle. Instead the strategy has been turned on its head.

In Africa BP is becoming the junior partner to ENI.  In Angola  BP has merged its upstream activities with ENI to form Azule Energy. ENI has also taken over BP’s Algerian assets.

In 2020 BP painted a glowing picture of how it would attain its green future:

  • From 2025 onwards, when its low-carbon projects would start to kick in, expected growth of between 12–14% would be maintained.
  • Reducing its oil production by 40% by 2030.
  • Its $25Billion divestment would provide the basis for up-scaling its low-carbon business.
  • Spending $5Billion per year to green itself and by 2030 the company would have 50 GW of net generating capacity.

Now the company is clawing back on reducing its oil production. Again, the duality of message has not helped the BP share price.

On the green front the company has initiated a series of joint ventures to speed up its transition.

  • BP and Ørsted have partnered to develop zero-carbon ‘green hydrogen’ at BP’s Lingen Refinery in north-‎west Germany, BP’s first full-scale project in a sector that is expected to grow rapidly. The 50 MW electrolyser project is expected to produce 1 ton of ‎hydrogen per hour – almost 9,000 tonnes a year – starting in 2024. The project could be expanded to up to 500 MW at a later stage to replace all of Lingen’s fossil fuel-based hydrogen. Final investment decision is due later this year.
  • BP and Equinor revealed that BP will become a 50% partner of the non-operated assets Empire Wind (offshore New York State) and Beacon Wind (offshore Massachusetts). BP and Equinor will jointly develop four assets in two existing offshore wind leases located offshore of New York and Massachusetts that together have the potential to generate power for more than two million homes.

BP joined Statkraft and Aker Offshore Wind in a consortium bidding to develop offshore wind energy in Norway. The partnership—in which BP, Statkraft, and Aker Offshore Wind will each hold a 33.3% share—will pursue a bid to develop offshore wind power in the Sørlige Nordsjø II (SN2) licence area.

The Message from Shell

Shell has just announced its highest results of the last 115 years: $40Billion in annual adjusted profit for 2022. Yet investor interest has been muted at best. Shell’s share price has only shown a downward spiral of 17% in the 2018-2022 period. Annual capital expenditures in the near term, according to Shell, could be in the range of $23-$27Billion up from an earlier estimate of $21-23Billion. Then the company  stated that its renewables and energy solutions would be $2-3Billion, marketing $3Billion, integrated gas $4Billion, chemicals and products $4-5Billion, and upstream  $8Billion. A more detailed breakdown is not available.

While its competitors—BP and TOTALEnergies—are busy buying and creating gigawatts of new energy, Shell maintains that it wants to focus on the value it generates for shareholders across the entire value chain. While the company is eager to proclaim value generation, there is little indication to shareholders what this means. For the period 2025-2030 Shell lumps together the capital budgets devoted to three categories:

Growth which entails renewables and marketing will receive 30% of Shell’s capital budget;

Transition which entails Integrated gas and chemical & products will receive 30-35% of Shell’s capital outlay; and

Upstream will get 30-35%.

The Dilemma of BP and Shell

Both BP and Shell continue to believe that their upstream divisions will provide the funding for their green future. Yet their share prices demonstrate that there is little trust in this vision. Depending on their upstream portfolio to lead them to a bright new green future is central to their dilemma. Upstream oil and gas is viewed by shareholders as a sunset industry. Upstream references, perhaps, a distant memory of the integrated oil companies of 50 years ago. Not one to build a green future on.

Both companies continue to believe in a dash of green and fail to understand the basic tenets of how the Green Alliance—Enel, Engie, Iberdrola, and Ørsted–is understood and viewed. What has set these companies apart is that they have created a huge competitive advantage which will be hard to challenge for newcomers. They have moved well beyond simply dabbling in green energy. These companies have become specialists and now moving on to the next level: creating a digital platform on which value does not reside in owning resources but rather in managing data-driven ecosystems. They are essentially borrowing a chapter from Uber, which does not own taxis or Booking, which does not own hotels. Some members of the Green Alliance have established new goals, such as CO2 neutrality by 2040, instead of 2050 to which Shell is pledged. Consider the competition.

Enel: committed to achieving CO2 neutrality by 2040 instead of 2050, achieving 75% of electricity from renewables and 80% digitalization of its customers on the grid by 2025. and having an installed generating capacity of 75GW by 2050.

Engie: pledged to reduce to CO2 neutrality by 2045, 45% of investments is focused on renewables and by 2030 will have 80GW of installed generating capacity.

Iberdrola: in the period 2023-2025 the company will invest $50Billion and achieve net zero for Scope 1, 2 and 3 before 2040. By 2030 the company will have installed capacity of 100GW, valued at $70Billion.

Note: Essentially, scope 1 and 2 are those emissions that are owned or controlled by a company, whereas scope 3 emissions are a consequence of the activities of the company but occur from sources not owned or controlled by it.

Ørsted: the Danish wind energy pioneer, continues to set new records. Ørsted share price in December 2022 was $93; five years earlier in 10 June 2016 it was $37. By 2030 the company’s goal is to have an installed capacity of 50GW. Ørsted is also involved with the building of two energy islands– Bornholm and North Sea– which will deliver 10GW of power

How will shareholders react to these companies in 2023? To date there is good news and bad news for green energy companies.

Table 2: Stock market prices of new energy companies 2018-2022


 Enel, the Italian power company has seen its share price remain flat. Engie, the large French energy giant has seen its share price  decrease by 12.5%. Iberdrola, the Spanish power company has had an increase of 71% and Ørsted, the Danish power company, has seen its stock soar by 90%.

Some Final Thoughts


BP has become a company in search of its soul. BP’s strategy of reducing its oil production by 40% by 2030 has been cast aside.

BP’s Greater Tortue Ahmeyim (GTA) field in Mauritana and Senegal is one of the few oil and gas projects the company is developing.

For 2023 the company has earmarked up to $7.5Billion for oil and gas projects.

Shareholders continue to habour doubts about BP’s green vision.


Shell should seriously consider splitting the company in two key divisions:

  • An upstream division which could be hived off to joint venture with other upstream divisions to ensure economies of scale;
  • An integrated gas division which could prove to be Shell’s star asset.

Wood Mackenzie’s AET-2 Scenario (Accelerated Energy Transition Scenario) predicts that in the following decades, market power will shift from OPEC to the giant gas producers, such as the USA, Russia, and Qatar.

According to AET-2, the “Era of carbon-neutral gas is born. AET-2 would require $300Billion to support Liquified Natural Gas growth globally and $700Billion to support dry gas development in North America.”  Given that Shell is the global leader of LNG (liquid natural gas)this is certainly a sweet sound for Shell’s LNG business.

Downstream could also prove to be a key energy transition asset. Shell’s REFHYNE Project, the Rhineland Refinery in Germany, could well become the precedent that the company needs to ensure it becomes the leading supplier of green hydrogen, where hydrogen production is powered by renewable energy for industrial and transport customers. Could the REFHYNE Project be duplicated many times over to ensure that green technology becomes a key ingredient in the energy transition?

Pay attention to Shell’s Pernis refinery in the Netherlands. One of the largest in Europe, Pernis refinery has a 400,000 b/d capacity and a complexity enabling the processing of many different crude types. The site is already deeply integrated with chemicals production and is being transformed into an integrated energy and chemicals park that will deliver low-carbon products.

The current message from shareholders is: maintain the cash bonanza and do not tamper with our cash machine. No doubt the share price of Chevron and ExxonMobil will continue to flourish. Will Europe’s oil and gas companies—in particular BP and Shell—resolve their clarity of messaging? How long will this cash bonanza last?

Finally, one should not mistake the current cash bonanza with energy security. Rather this is a sign of energy insecurity which could very quickly end without further notice. Energy security will continue to be a key theme for the coming generations and no doubt the role of the members of the Green Alliance will be crucial.

Gerard Kreeft, BA (Calvin University, Grand Rapids, USA) and MA (Carleton University, Ottawa, Canada), Energy Transition Adviser, was founder and owner of EnergyWise.  He has managed and implemented energy conferences, seminars and university master classes in Alaska, Angola, Brazil, Canada, India, Libya, Kazakhstan, Russia and throughout Europe.  Kreeft has Dutch and Canadian citizenship and resides in the Netherlands.  He writes on a regular basis for Africa Oil + Gas Report and is a guest contributor to IEEFA(Institute for Energy Economics and Financial Analysis) based in Cleveland, Ohio, USA. His book ‘The 10 Commandments of the Energy Transition ‘is on sale at




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