Global Oil Giants Revive Exploration Operations

After years of public commitments to move away from fossil fuels, global oil giants are redrawing their drilling maps and ramping up exploration—from the Gulf of Mexico to Namibia—facing the reality of a slower-than-expected transition to renewable energy, growing concerns over energy security, and persistently high profits from oil and gas operations.

Major European oil and gas companies pledged in the early 2020s to gradually reduce fossil fuel production and invest billions of dollars in low-carbon energy. However, as the energy transition has progressed far more slowly than expected and energy crises have exposed shortages in traditional energy supplies, these firms have significantly shifted their strategic priorities. U.S. oil giants ExxonMobil and Chevron never truly pivoted to renewables and thus do not need to "return" to oil and gas. Yet both have intensified exploration efforts to expand reserves through core assets.

The most notable shifts have come from Europe’s oil majors. Shell and BP have recognized that the energy transition faces greater obstacles than anticipated and fails to deliver the same level of profitability and shareholder returns as oil and gas. As a result, they are cutting billions of dollars in renewable investments and instead focusing on strengthening their oil and gas reserve portfolios.

Shell CEO Wael Sawan stated during the company’s second-quarter earnings call at the end of July: “Reducing global oil and gas production would be dangerous and irresponsible,” expressing dissatisfaction with recent exploration outcomes: “We’ve undergone a major reorganization of our exploration unit. The reality is that despite progress in certain areas, overall performance has fallen short of expectations.” Shell will continue investing in key regions such as the Gulf of Mexico, Malaysia, Oman, and Namibia, planning to spud multiple exploration wells within the next six to twelve months.

BP announced a major strategic shift in February, increasing upstream oil and gas investment to $10 billion annually while cutting over $5 billion in clean energy spending. The company plans to launch 10 new major projects by the end of 2027 and an additional 8 to 10 by 2030, targeting daily production of 2.3 to 2.5 million barrels of oil equivalent by 2030 with continued growth potential. This marks a sharp contrast to its previous strategy of reducing oil and gas output by 2030. During the second-quarter earnings call, BP CEO Murray Auchincloss said the company had already launched five new major oil and gas projects this year, approved four more, and made 10 exploration discoveries—including a major find in the Bumerangue block offshore Brazil, BP’s largest discovery in 25 years.

TotalEnergies of France bolstered its exploration portfolio in the second quarter by securing exploration rights in the U.S. Gulf of Mexico and Malaysia. ExxonMobil and Chevron are concentrating on core areas such as the Permian Basin, Guyana, and Kazakhstan. Following Chevron’s acquisition of Hess, it gained a 30% stake in Guyana’s Stabroek block, which currently produces over 660,000 barrels per day. This asset provides Chevron with additional resources and revenue, especially as the company’s reserve replacement ratio has declined in recent years, with oil and gas reserves now at their lowest levels in at least a decade. Chevron CEO Mike Wirth said during the second-quarter earnings call: “I’m not satisfied with our exploration results over the past few years, but I must acknowledge that our exploration team has operated with very limited scope.” He added that exploration needs to play a significant role in achieving Chevron’s goal of a balanced and diversified portfolio, and that the company is making changes to its plans and methods. Chevron Vice Chairman Mark Nelson noted the company is also considering frontier exploration, planning to drill in Suriname, Namibia, and Egypt by the end of this year.

While focused on the Permian and Guyana, ExxonMobil is also seeking opportunities elsewhere, having reached an exploration work agreement with Libya and preparing to return to Trinidad and Tobago, where it will resume offshore exploration operations northwest of Guyana’s Stabroek block.

Regarding this industry trend, Jessica Ciosek, Wood Mackenzie’s Head of Americas Exploration Research, noted: “Energy companies aren’t just replenishing drilling reserves—they’re expanding into potential new exploration frontiers.” Firms are leveraging new technologies such as seismic imaging and AI algorithms to improve exploration efficiency. BP’s exploration team used these techniques to achieve 10 discoveries this year, including the Bumerangue block offshore Brazil—the company’s largest find in 25 years. Despite prolonged underinvestment in global exploration, industry leaders are restarting resource searches using cutting-edge technology. As Shell’s Sawan put it: “We are taking a long-term view in exploration.”