US gas opportunity emerges after decades of decay

Pressure on energy sector

While Russia’s invasion of Ukraine has highlighted the fragility of the global energy system, the seeds of the current energy cycle were sown some years ago.

 Three factors stand out as having formed the energy cycle underway today: debt, decarbonisation and dividends. The accumulation of significant balance sheet leverage through the last spending and acquisition cycle resulted in an industry that was by 2020 heavily burdened with debt. For example, by the end of 2020 Exxon Mobil's net debt to capital had risen to a 30-year high, putting its dividend at risk as the company balanced ways in which it could invest in future growth while urgently addressing its leverage issues. To both sustain its dividend and bring down leverage, the comp...