It is a question that dominates the energy industry and will determine what the oil majors, including Shell and BP, look like in the future. Driven by investor pressure and a need to rein in costs after the oil price halved in 2014, the industry has largely abandoned new investment in the type of mega-projects, from Arctic exploration to Canadian oil sands, which were once its forte.
In the second half of this decade total capital expenditure by the large oil and gas groups is projected to fall by almost 50 per cent to $443.5bn from $875.1bn between 2010-15, according to Norwegian consultancy Rystad Energy. Although partly offset by a fall in oilfield development costs, the drop also coincides with the big groups ploughing more capital into shorter-term projects, which pay off quickly, as well as renewable energy. The moves come amid fears that electric vehicles pose a huge threat to oil's dominance.
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