Big Oil Could Trim Buybacks After Price Rout

Big Oil Could Trim Buybacks After Price Rout

Analysts are not ruling out the possibility that some oil and gas supermajors could announce as soon as this week reduced share buyback programs for this year compared to the guidance from early 2025, before the oil price slide.

Investors will be more focused to learn how Big Oil plans to cope with the 12% decline in oil prices so far this year and whether the dividend and share repurchases still stand as pledged at the Q4 earnings calls, than on the exact number of billions of U.S. dollars the firms made in the first quarter, analysts at investment banks have told Reuters.

This week, most Big Oil firms report first-quarter earnings, starting with BP on Tuesday and finishing with Exxon, Chevron, and Shell on Friday.

Some of these have previewed part of the factors likely to have affected their Q1 earnings.

Shell sees LNG liquefaction volumes down in the first quarter. But Shell’s Trading and optimization in the Chemicals and Products division is expected to be significantly higher than in Q4 and be in line with Q2 2024 and Q3 2024 contributions on the back of a higher refining margin and increased refinery and chemicals plant utilization.

U.S. supermajor ExxonMobil, for its part, expects its first-quarter earnings to be higher than in Q4 by up to $2 billion, thanks to higher oil and gas prices and rising refining margins.

More than on Q1 results, investors and analysts will be focused on the buyback guidance.

Chevron may reduce planned repurchases to the lower end of its guidance and BP could also be forced to trim the pace of buybacks, analysts briefed by Reuters expect.

Some could also find other ways to reduce the pressure of the lower oil prices. Italy’s Eni, for example, reduced last week its capital expenditure plans for 2025 and vowed to cut more costs, but it maintained the planned shareholder distributions such as dividend and buybacks.

By Charles Kennedy for Oilprice.com