'Big players face output struggle'

Credit Suisse expects the major US and European integrated oil companies to struggle to boost output to 2020, saying the sector is unlikely to see any volume growth over the coming cycle.

However, the brokerage said Chevron is the only one of the major players where it sees the potential for volume to stay flat or even increase slightly over the coming cycle to 2020.

“When we talk about growth in the sector, we mean upstream oil and gas production growth: this is where 70% of the capital is employed and where 90% of expansionary capex is deployed,” Reuters quoted analysts led by James Neale saying in a note dated 17 September.

Credit Suisse upgraded Chevron to “outperform” from “neutral”, saying its production showed good near-term oil weighting with contributions from major low-decline projects. It raised its price target to $80 from $70.

The brokerage said most of the major players have failed to deliver their promises on volume growth.

Upstream Online