Capital Allocation in the Oil and Gas Industry

Oil and gas firms face pressures between renewables and production expansion, prioritizing dividends, debt reduction, and selective CapEx. A shift toward production, gas, and low-emission assets is evident, with debate over managed decline vs. reinvention. Fossil fuels will drop by 2050 as EVs, hydrogen, and CCUS reshape demand. Policy shifts like the IRA will accelerate transition, while emerging markets face financial hurdles. Political resistance clashes with economic inevitability.