The Strategist

FT: Major Western oil companies plan to buy back shares for $41B

02/22/2022 - 06:09

The Financial Times (FT) reported that seven major Western oil and gas corporations - BP, Chevron, Shell, Eni, ExxonMobil, TotalEnergies, and Equinor - plan to buy back their shares for a total of $41 billion this year, according to RBC Capital Markets' projections.

Roo Reynolds
Roo Reynolds
The total sum is slightly lower, at $38 billion, according to Bernstein Research. In any case, this is a new high since 2008, when the businesses repurchased $46 billion worth of stock. Oil corporations repurchased shares worth $21 billion in 2014, the last year that oil prices per barrel were above $100.

Shell will spend the most on share repurchases in 2022, at $12 billion. BP is in second place, with a market capitalization of $6.5 billion. Other businesses will set aside between $2 billion and $6 billion for this purpose.

Analysts attribute such intentions by oil and gas corporations to the current market condition and a desire to earn shareholders' trust. “The industry is in better form than it has been in many years”, say analysts.

The major question now is how long this cycle will go, RBC Capital Markets says. According to him, these firms will pay another $50 billion in dividends to shareholders, and if oil prices continue to climb, owners' income might be considerably higher.