2025: Increased Focus on Oil and LNG

While many international oil companies, national oil companies (NOCs) and integrated independents look set to continue with M&A, upstream expansion and (revised) transition-linked spending in 2025, others will pursue their own paths or remain limited in what they can do by factors including geopolitics, funding issues or unbending state ownership. Here are the some of the key corporate strategy areas that Energy Intelligence will be watching in our covered universe over the next 12 months:

• The difference between US- and Europe-based majors has seldom been so marked but is likely to narrow in 2025.

While US duo Chevron and Exxon Mobil have limited, focused, mainly domestic low-carbon business aims and are increasingly bullish about plans to raise oil and gas production, UK-based BP and Shell have struggled to adapt to diverging shareholder demands and have rowed back on several transition goals. Both are set to outline their revised strategies early in 2025. Shareholder activism seeking faster decarbonization appears to have peaked, so most investors now expect, or hope for, a renewed focus on oil and gas next year and beyond. Such strategy shifts may come at the expense of some less profitable new business ventures such as hydrogen, offshore wind and carbon capture and storage.

TotalEnergies is, and will likely remain, the outlier among the five leading Western majors, doggedly pursuing its two-pillar strategy of a small, if somewhat upgraded (to 3%), annual increase in production out to 2030 and continued LNG investments. The French company is also eyeing a growing presence in power generation, albeit with a shift away from offshore wind toward solar and gas-fired electricity, which may see earlier power targets missed.

Smaller European companies such as Eni, Repsol and Equinor appear more committed to their chosen low-carbon businesses, but — absent a plunge in oil prices — will they start to waver as they see their competitors profit from a re-emphasis on oil?

• Some NOCs, notably from the Eastern Hemisphere, are likely to keep investing overseas and in transition businesses; others will remain hamstrung by their links to the state.

Among the state oil giants, cash-rich Saudi Aramco and Abu Dhabi National Oil Co. will likely lead the global M&A charge, even though both have big oil and gas projects to fund at home. While still focused on ramping up domestic LNG production, QatarEnergy could still add to its growing portfolio of overseas upstream assets in 2025.

Petronas and Pertamina have both surprised to the upside with their net-zero aims, but — like the Western majors — they are unlikely to resist the lure of more profitable hydrocarbons. Rumored upstream tie-ups with Eni are in the cards for one or both of these Southeast Asian NOCs.

In the Americas, Petrobras is upping capex for 2025-29, partly to get back into domestic ethanol, which it exited in 2017, and where Shell and BP have since made big inroads. More than half of Petrobras’ guided $4 billion bio spend will go to ethanol over the five-year period, but the listed NOC will shave renewables investments, exclusively targeting solar and onshore wind expansions going forward.

The region’s old school NOCs, notably Petroleos de Venezuela and Pemex, are unlikely to make big changes unless there are seismic political shifts in their home countries, although Pemex’s ill-defined plans to attract new investment could yet surprise.

• Predicting how Russian companies will fare in 2025 remains as difficult as it has been since Moscow’s full-scale invasion of Ukraine in February 2022.

Earlier this month, Russian President Vladmir Putin surprised some observers by relaxing the rules on how state-controlled oil giant Rosneft’s shares can be sold. BP still owns 19.75% in the firm, and a sale of the stake could benefit both parties. Similarly, Total retains its 19.4% stake in gas independent Novatek and in two related LNG projects, while the status of the 30% stake in the Sakhalin-1 oil project seized from Exxon could also change.

If US President-elect Donald Trump does, as he claims he will, swiftly broker an end to the war in Ukraine, beleaguered Gazprom’s fortunes could improve. As things stand, the state-run gas giant is set to sell very limited volumes of piped gas to Europe next year, but a peace deal could lead to an easing of EU sanctions on Russia and some recovery. Similarly, major projects that have been delayed or complicated by sanctions, such as Rosneft’s Vostok Oil or Gazprom’s Ust-Luga gas processing and LNG scheme, could make headway if geopolitics change. In the meantime, Gazprom is working hard to sell more gas to China and to use Turkey as a sales hub to the West.

• While some predict a tsunami of LNG supply from 2027, and others several waves by the end of the decade, 2025 looks set to be another good year for LNG producers and traders.

Top Western LNG player Shell is eyeing 20%-30% growth in its LNG business by 2030 (versus 2022 levels). Finalizing the acquisition of Singapore-based trader Pavilion Energy will add about 6.5 million tons per year of LNG to Shell’s global portfolio in 2025.

BP is expected to ship the first LNG cargo from its Greater Tortue-Ahmeyin project off Senegal and Mauritania in early 2025, after a more than two-year delay. But, despite bullish comments from Total’s CEO, the restart of work at the French major’s 13 million ton/yr Mozambique LNG project does not look imminent given continued political unrest there and problems securing new finance. The latest timeline is for the plant to come on line in 2029 — and Total needs it if it is to meet its targeted 50% LNG portfolio increase by 2030. Total’s much delayed Papua LNG project should also contribute volumes by 2028-29 if FID is taken in 2025.

Woodside, with the $1.2 billion acquisition of US developer Tellurian under its belt, is meanwhile targeting 25 million tons/yr of global capacity by 2030, while seeking partners before taking FID on Tellurian’s Louisiana LNG project in early 2025. In December, Woodside and Chevron announced an asset swap under which both gained majority control of their Australian LNG projects. More such moves are likely in 2025 as LNG players look to declutter their portfolios and optimize trading opportunities, while Mideast NOCs could buy into more LNG assets.

Meanwhile, there should also be a resolution in 2025 of Shell, BP and Repsol’s ongoing legal battles with US developer Venture Global over the delayed commercial start-up of the 10 million ton/yr Calcasieu Pass liquefaction plant in Louisiana.

• The big oil trading houses continue to diversify and to grow at pace, despite legal woes.

Traders look set to splash more cash in 2025 as they continue to diversify, especially on their growing gas and LNG businesses.

While the Western majors, some NOCs and independent players have new liquefaction plants in operation or under construction, the “Big Five” traders — Vitol, Trafigura, Glencore, Gunvor and Mercuria — together handle more than 20 million tons/yr of LNG, a volume that is expected to grow in coming years. Former British army officer Richard Holtum will become Trafigura’s CEO on Jan. 1, having previously headed the company’s gas and LNG division. Among items in Holtum’s 2025 in-tray: a corruption trial in Switzerland relating to Angola kickbacks in 2009-11. Several former Glencore staffers face corruption charges in the UK relating to oil dealings over a decade ago in West Africa.