Resilience was the dominant theme from the second quarter earnings calls held by the large integrated oil and gas companies: resilience of the balance sheet to volatile oil prices and weak gas prices; resilience of operating assets following some unplanned outages; and resilience of the portfolio to the challenges of the energy transition.
Recent geopolitical events, particularly in the Strait of Hormuz and simmering US-China trade tensions, are creating concerns around supply and demand, driving volatility in prices. Balance sheets are stronger than during the oil price downturn, but companies are remaining disciplined in their capital spending. Questions raised by analysts attending the earnings calls probed companies’ capital spending plans for the remainder of this year and 2020 and the projects budgeted for.