Petroleum++: Uptick in Capital Expenditures Highlights the Continued Need for Petroleum Engineering Skills

Abstract

Some oil and gas companies, the major source of employment for SPE members, revealed their budgets for 2023 and the following years. A look at where the companies plan to direct their spending sheds light on the areas of expected job availability and needed competencies. The numbers show companies’ major allocation of funds for oil and gas exploration and production and concerted efforts to reduce their carbon footprint by reducing emissions resulting from their current operations (whether it is under scope 1, 2, or 3) and increasing efforts to develop new sources of energy. Oil and gas companies’ plans reflect a strategy that may be described as Petroleum ++. The Federal Reserve Bank of Dallas conducts a quarterly energy survey, and in its most recent one (released 29 December), it asked respondents about expectations for capital spending in 2023 vs. 2022. Most reporting companies indicated they plan to increase their capex spending within a range of 8 to 25%. Some major international companies announced additions to their capital budgets. While some reported their plans for 2023, others reported 5-year plans. I wish all were reported the same way with specific numbers for various activities so that we engineers can input all values in a table and reach quantitative conclusions, but this is not the case, and we must review what is being reported and reach a generalized understanding about future directions. For example, Chevron reported about $14 billion capex in 2023 with 82% going to upstream oil and gas projects, 14% towards the effort to lower its carbon footprint, and 7% toward new energy developments. ExxonMobil reported a capex budget of between $20–25 billion annually through 2027 with 15% directed to efforts to lower emissions. TotalEnergies plans to increase its annual budget by about 14% in the 2023–2025 period to about $14 billion per year and appears to be targeting about $6 billion for new oil and gas assets and $4 billion for new energy. Saudi Aramco approved $296 billion for 2023 and has created a $1.5-billion sustainability fund to invest in technology that can support a stable and inclusive energy transition. Petrobras will increase investment during the 2023–2027 period to $78 billion with 83% earmarked for traditional exploration and production activities, 6% to reduce carbon emissions, and about 1% for the decarbonization fund. The directions from the announced spending plans of oil and gas companies indicate that more than about 80% of their budgets are directed toward traditional oil and gas exploration and production and concerted efforts to reduce emissions and carbon footprint, and measurable sustainable investment in new energy. This clearly shows SPE members, employers, and educational institutions the needed competencies and technical skills that we all need to continue our work and provide the world with the energy it needs. As mentioned earlier this may be summarized by Petroleum ++. It is also reasonable to expect that with the increase in budgets of oil and gas companies, there will be an uptick in the employment of petroleum professionals. A modest increase that we just witnessed in the number of SPE members in 2022 for the first time in a few years may be a good indication.