Majors reaffirm commitment to big exploration as crisis cuts budgets

A clearer picture is emerging of how the Majors are re-assessing exploration spend in 2020. In response to the myriad of challenges facing them, all have released updated and reduced capex guidance for the year. Although details of exactly how much will be cut from exploration spend have been thin, we have assessed the revised plans and estimated the likely impact. We estimate the Majors will cut at least US$2.5 billion from exploration spend in 2020. This cuts combined original budgets by 25% from US$10.3 billion to US$7.8 billion or less. However even though budgets are being hit hard, we believe the Majors remain committed to high-impact exploration. The highest quality plays such as Guyana, Suriname and Brazil have the greatest potential to move the needle and create lasting value.