Since BP admitted that its green transition efforts ended in failure, the trend in the energy sector has been unanimous – major oil companies are returning to oil and gas operations. In late February of this year, BP announced that it would increase its annual investment in oil and gas production by 25%, while cutting its energy transition-related business investments by 70%.

This energy giant is making a strong comeback. According to the Financial Times, BP plans to launch 27 new oil and gas projects in the next five years. The company has just announced a final investment decision for the natural gas project in Trinidad and Tobago, which is expected to come into production in two years, with a peak output of 62,000 barrels of oil equivalent per day. In addition, a $25 billion contract from BP was recently approved by the Iraqi government to develop key oil fields in the Kirkuk region.

On the other hand, the UK and Dutch energy giant Shell has come to realize through a relatively moderate approach that any transition from hydrocarbons to weather-dependent power generation (such as wind and solar) is a high-risk bet. Although a Dutch court ordered Shell to reduce its oil and gas output to lower emissions, the company's investments in wind and solar power have fallen short of expectations. Subsequently, it successfully appealed, and the appellate court overturned this ruling.

Shell recently updated its short-term plans, reducing its spending targets for the next three years and prioritizing the development of its natural gas business. Between 2025 and 2028, the energy giant plans annual capital expenditures of $20 billion to $22 billion, down from its 2023 annual budget of $22 billion to $25 billion. In terms of production targets, Shell aims to increase its annual liquefied natural gas sales by 4-5% by 2030.

TotalEnergies is one of the exceptions among oil giants that have failed in their transformation. The French energy group has implemented a diversified strategy to shift from oil and gas to low-carbon electricity, but notably, it has never neglected its core business while advancing this transition.

In a recent announcement, TotalEnergies claimed that it has achieved the highest average Return on Capital Employed (ROCE) of 14.8% in the industry while significantly reducing emissions. Recent public reports indicate that TotalEnergies has secured the first tranche of external financing for its East African Crude Oil Pipeline (EACOP) project in Uganda, marking an important "milestone" for the project.

Compared to their European counterparts, American oil and gas giants like ExxonMobil and Chevron remain steadfast and confident in their commitment to the traditional oil and gas sector. While maintaining their core businesses, these companies have made only limited financial concessions towards the energy transition, resulting in significantly better performance than European firms that have aggressively shifted towards green energy.

ExxonMobil plans to increase oil and gas production by 18% over the next five years and will raise capital expenditure accordingly. Chevron has just launched a major expansion project at the Tengiz oil field in Kazakhstan, which will boost production at this giant field by 260,000 barrels per day. Meanwhile, the U.S. Federal Trade Commission (FTC) approved Chevron's $53 billion acquisition of Hess Corp. and its Guyana oil assets in January this year, although the deal has since been challenged by ExxonMobil and faces further review.

From the strategic layout of industry giants, the peak period of the oil industry is far from over.

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