Big Oil’s Production Keeps Soaring Despite Deep Spending Cuts
Major oil and gas firms have shifted toward higher shareholder returns and lower expansion spending since the 2020 price crash, collectively returning over $100 billion a year in dividends and buybacks—about 80% of earnings. Despite a near 50% drop in U.S. upstream capex among the 30 largest public E&P firms in 2025 and sharply reduced acquisition activity, the group recorded record oil production in 2025 while revenue rose 7%.
Why It Matters
The disconnect between rising production and falling capital investment signals that efficiency gains, shorter-cycle projects and technologies like AI are reshaping how oil is produced, but declining reserve additions and lower DUC inventories could reduce producers' ability to quickly expand supply during future tight markets.
Key Facts
- Annual shareholder returns (dividends + buybacks): Over $100 billion collectively for Exxon, Chevron, BP, Shell and TotalEnergies (past five years)
- Shareholder returns as share of earnings: Nearly 80% of earnings for the five companies over the past five years
- U.S. E&P capex change: Capital expenditure by the 30 largest U.S. publicly traded E&P companies fell 49% year-over-year in 2025 (EY)
- Exploration spending (2025): $4.8 billion, down 11%, representing ~3% of total capex for the 30-company group
- Acquisition spending change: Down 70% (EY)
Since the 2020 oil price collapse, the biggest integrated oil companies have prioritized returning cash to shareholders and curtailed expansion spending. Exxon Mobil, Chevron, BP, Shell and TotalEnergies together have averaged more than $100 billion a year in dividends and share buybacks over the past five years, consuming roughly 80% of their earnings, according to industry reporting.
That shift is reflected across U.S. upstream firms. EY found capital expenditures by the 30 largest publicly traded U.S. E&P companies fell 49% year-over-year in 2025, while exploration spending dropped 11% to $4.8 billion and acquisition outlays declined about 70%. The 30 companies account for roughly 43% of U.S. oil and gas production.
Despite the pullback in spending, the group recorded record oil output in 2025 and saw revenues climb about 7%, a contrast EY highlights as production and reserve replacement moving in different directions. Producers have leaned on efficiency improvements and shorter-cycle projects—longer horizontal wells, batch completions and digital tools including AI and predictive analytics—to raise output without proportionally increasing drilling budgets.
Operational choices have also helped: companies have completed drilled-but-uncompleted (DUC) wells instead of drilling new wells, which is typically cheaper. The U.S. DUC inventory fell to about 4,972 wells in May—the lowest level tracked by the EIA since 2013 and the 14th consecutive month of decline. At the same time, EY reported that reserve additions from discoveries and extensions decreased 11% year-over-year, meaning reserves did not fully replace production for the first time in five years.
There are offsets in gas: U.S. natural gas reserves rose 14% year-over-year, with discoveries up 21% and production growth of 18% Y/Y; reserve revisions turned positive for the first time in five years. EY said these trends reflect producers positioning for stronger demand trends tied to energy security, industrial competitiveness and AI-related infrastructure demand.
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