CVX - Europe's second largest gas supplier reducing investments in 2022 despite record prices

The Norwegian Oil and Gas Association expects investment in the sector to fall 6% in 2022, even as the State grants favorable tax treatment to the sector and natural gas prices reach record levels. The Association expects to see 174b NOK invested on the Norwegian Continental Shelf ("NCS") next year, or ~$19.4b; this compares to pre pandemic investment levels of 195b NOK or ~$21.6b. With State-owned Equinor (NYSE:EQNR) planning to keep NCS capital spending flat through the end of the decade, the Association's expectation for 2023+ investment growth will have to come from private operators, as majors like Chevron (NYSE:CVX) and Conoco (NYSE:COP) have largely retrenched from the high-tax basin, despite higher prices. (NG1:COM) (NYSEARCA:USO) (CL1:COM) (CO1:COM). As the second largest natural gas supplier to Europe, and with European natural gas prices shattering records, the investment discipline is likely frustrating for European politicians forced to look to Russia for additional energy supplies.

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Europe's second largest gas supplier reducing investments in 2022, despite record prices