EUR 85.86 For Business Accounts Only

Early look suggests muted 2023 exploration spending

An early look at 2023 E&P budgets suggests flattish to declining exploration spending YOY as E&P companies continue to allocate a higher proportion of their capital spend to development and production rather than exploration. Petrobras, Woodside, and PTTEP are all planning for double-digit YOY growth in E&P spending next year, while keeping exploration budgets flattish or lower YOY. Our capex breakdown for US majors Chevron and Exxon also suggests flattish offshore spending in 2023, with exploration likely seeing a downward trend as neither for the first time in their history made any mention of exploration in their most recent updates. In our view, these data points confirm our cautious view on the seismic sector recovery as we still believe that healthy RRRs and reserve lifetimes among large E&Ps suggest no immediate need for substantial efforts to increase exploration.