This month’s Horizons explores a defining tension for the world’s largest oil and gas companies: how to sustain long-term production while maintaining strict capital discipline demanded by investors. After years of reduced upstream investment, 30 leading exploration and production players now face a looming 22 million barrels of oil equivalent per day (mmboe/d) supply shortfall by 2040, nearly the size of two Permian basins.
Demand for oil and gas is still expected to grow by around 6% through 2030, meaning this gap must be filled simply to maintain the group’s current 30% share of global supply. But the industry’s traditional levers are no longer as effective. US tight oil growth is plateauing, high-quality acquisition targets are scarce and access to resource-rich countries remains constrained.
At the same time, investor expectations have shifted dramatically. Companies are returning 30–50% of cash flow through dividends and buybacks, cutting reinvestment rates to roughly half of mid-2010s levels. The result is a complex balancing act: sustain production and cash flow today while securing longevity in an increasingly capital-constrained future.
Wood Mackenzie’s latest Horizons report examines how the sector can square this circle, from leveraging AI and technology to boost recovery, to pursuing creative M&A, partnerships and new financing structures that unlock growth without undermining capital discipline.
Our Horizons Live session brings together our experts to discuss how Big Oil can navigate the longevity challenge and what it means for supply, investment and the broader energy transition.
Key themes include:
- Capital discipline vs. supply security: why rising shareholder returns are constraining reinvestment and how this shapes future production outlooks.
- The 22 mmboe/d longevity gap: what’s driving the widening supply shortfall to 2040 and why traditional growth engines are losing momentum.
- Limits of the old playbook: how plateauing US tight oil, scarce M&A opportunities and restricted access to key resources are reshaping strategy.
- Technology as a growth lever: how AI, digitalisation and enhanced recovery can improve operational efficiency and extend asset lifetimes.
- Strategic reinvention: why partnerships, innovative deal structures and new financing models will be critical to sustaining long-term portfolios.
- Implications for the energy transition: how tighter capital allocation could influence investment in renewables, carbon management and future low-carbon growth options.
Join us live as our expert panel explores which companies are best positioned to close the longevity gap, who risks decline or consolidation and how capital discipline will redefine competitive advantage in global oil and gas.
Our panel:
Simon Flowers, Chairman, Chief Analyst and author of The Edge
Neivan Boroujerdi, Director, Corporate Research
Greig Aitken, Director, Corporate Research
Tom Ellacott, Senior Vice President, Corporate Research