Good morning, here's what the Oilman has for you today:

• Exxon, Chevron Boost Oil, Gas Spending for 2024

• Big Oil LNG Dispute with Venture Global Heats Up

• Upcoming Oil and Gas Events

• Tweet of the Day

Exxon, Chevron Boost Oil, Gas Spending for 2024

Exxon and Chevron both recently reported budget updates for next year.

In both, spending is seen to be higher than this year.

And most of it is going into their core business.

Transition? What transition?

Exxon has budgeted $23 to $25 billion for exploration and production in 2024.

This is set to rise further to up to $27 billion by 2027.

Because Exxon plans a 10% increase in oil and gas output.

Chevron is upping its 2024 budget by 11% from 2023 to %18.5 to $19.5 billion.

Guess where most of this is going?

Upstream. More specifically, U.S. shale. Even more specifically, the Permian.

Just as Exxon is allocating a lot of its budget to the Permian.

Sure, both are also investing a few billions in low-carbon stuff like biodiesel and lithium.

But the bulk is still going into oil and gas.

That’s certain to make many COP28 attendees mad.

Cautious supermajors

That Chevron’s and Exxon’s so-called traditional business is still going strong is clear.

But the pressure to move into low carbon is also quite strong.

Even so, both have demonstrated considerable caution in that move.

Exxon, for instance, said that spending on low-carbon stuff would depend on policies, demand, and markets.

Chevron, on the other hand, is spending $2 billion on lowering its own emissions.

Part of that $2 billion is for expanding “new energy business lines” without specifying what these are.

They’re right to be cautious. Why spend billions if the IRA gets thrown out after the 2024 elections?

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Big Oil LNG Dispute with Venture Global Heats Up

A while ago, Shell and BP accused Venture Global of ripping them off and selling their LNG on the spot market.

Venture Global cried Big Bad Oil Wolf.

Now, the dispute is heating up, with the reputation of U.S. LNG potentially at stake.

Not your supermajor’s LNG

Ten years ago, BP and Shell inked long-term supply contracts with then-fledgling Venture Global.

Last year, when the Ukraine war took gas prices sky high, Venture Global took to the spot market.

And it raked in $14 billion from it.

Now, the big players are demanding their LNG.

They have also taken Venture Global to court for violating its long-term contracts.

The plaintiffs also include Spain’s Repsol and Italy’s Edison.

Shell says its long-term contract provided Venture with the money to build its LNG facility.

“Venture Global’s tarnished name and reputation is the result of a solo act, written and performed by them,” it said.

Venture, for its part, has blamed technical problems for the delay in the start of deliveries to the long-term contract clients.

The fact that it is meanwhile selling LNG on the spot market doesn’t make it look good, though.

Even if it claims it told the buyers about it. They deny it did.

Reputation risk of exaggeration

Venture’s response to the accusations is that Big Oil wants to trample the little guy.

But with a market cap of $90 billion, “little” is hardly fitting for the company.

What the dispute could do is affect its access to backers for its second LNG project.

These things cost tens of billions to build.

Developers need long-term buyers to come in early.

If the “tarnished name” interferes with this, it will interfere with capacity growth plans.

It’s your basic daytime drama but in LNG so that it might have more serious implications.

Upcoming Oil & Gas Events

• December 15: 23rd Annual KOGA Christmas Party, Bodley Bullock House, Lexington, KY

• January 16: TIPRO/IPAA Leaders in Industry Luncheon, Petroleum Club of Houston, Houston, TX

• January 17: IPAA Private Capital Conference, The Post Oak at Uptown Houston, Houston, TX

• January 17-18: GO-WV Winter Meeting, Marriott Town Center Hotel, Charleston, WV

• January 18: Kansas Oil and Gas Day Legislative Reception, Kansas State Capital, Topeka, KS

• January 23-25: POWERGEN International, Ernest N. Morial Convention Center, New Orleans

Around the Global Patch

🇸🇦 Vision 2030 setbacks acknowledged by Saudi Arabia.
🇨🇳 China faces its first annual dip in oil imports since April.
🇷🇺 Russia's arctic trade boosted by cutting-edge icebreaker.

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