Goldman Sachs Annual Report: Oil & Gas Capex to Return to Double-Digit Growth by 2027
Miles Bennett
Goldman's 23rd annual Top Projects report covers 516 oil and gas fields and concludes that AI and digitalization are driving a deepwater and shale globalization cycle — upstream capex is set to hit +11% growth in 2027, marking the formal end of a decade-long capital-discipline era.
The market has flipped — why are big spenders suddenly winning?
For a decade, oil and gas rewarded capital discipline and dividends. That has reversed: companies with higher reinvestment ratios outperformed peers by ~20 percentage points over the past six months.
The correlation between capex intensity and share price has risen to +0.80 — the strongest since the early-2000s commodity boom. This means → investors are no longer just chasing dividends; they are betting on who holds tomorrow's barrels.
In plain terms = "save money" used to be rewarded; now "spend money to find new oil" is rewarded — the rules of the game have flipped.
The pressure behind the flip: top-project resource life has fallen from ~55 years in 2012 to ~20 years in 2026 — a 60% decline in a single decade.
Exploration is reviving — who is leading?
Barrels discovered over the past three years are up 20% versus the prior three-year period. The 2025 exploration success rate hit a five-year high.
Executive attention to exploration on earnings calls has rebounded to near the 2014 peak. This means → exploration has returned from strategic exile to the center of the agenda.
AI and digitalization are the enablers — seismic imaging (using sound waves to map subsurface oil structures) has become far more precise, raising deepwater hit rates and lowering breakeven costs.
Leaders: Galp tops the field on the back of a multi-billion-barrel discovery in Namibia in 2024; ENI and BP follow closely.
U.S. shale is maturing — is the global shale revolution just starting?
U.S. shale has delivered ~60% of non-OPEC supply growth, but after 15 years of expansion it is entering maturity. Goldman expects a visible slowdown by decade-end, with the Permian Basin accounting for most of the deceleration.
Residual growth is tilting toward NGL — natural gas liquids, the lighter hydrocarbons separated from natural gas — rather than crude oil. This means → what U.S. shale can still add is increasingly not the type of oil the market needs most.
Shale technology is going global: Goldman forecasts ~1.3 million boe/d of new shale liquids outside the U.S. by 2030, concentrated in Argentina's Vaca Muerta and Saudi Arabia's Jafurah.
This reflects a trend reversal: Continental Resources entering Vaca Muerta, EOG moving into the UAE — U.S. shale operators are pivoting from a decade of "re-shoring" to going international.
The capex inflection — deepwater takes the baton, LNG cools?
Goldman projects global upstream capex to return to double-digit growth (+11%) in 2027, led by deepwater: 2027 deepwater FIDs — final investment decisions, the formal green-light for a project — are forecast at 75% above the trailing five-year average.
Deepwater hotspots span Brazil, the Gulf of Mexico, Nigeria, Angola, and frontier basins such as Namibia.
LNG is moving the other way: FIDs surged in 2025–2026 but will drop sharply afterward. Goldman sees an LNG supply glut arriving after 2028. The attack on Qatar's Ras Laffan delayed the glut's timing but did not change its direction.
In plain terms = the industry's "next big bet" has shifted from LNG to deepwater oil.
Non-OPEC growth's "optical illusion" — what happens when you strip out the reclassification?
Non-OPEC output appears to plateau by decade-end, but the UAE's exit from OPEC in April 2026 mechanically reclassifies ~4.5 million boe/d into the non-OPEC column — a statistical switch, not new supply.
Strip that out, and Goldman expects non-OPEC production (excluding Russia and U.S. shale) to decline from 2028 onward, with residual growth coming mainly from NGL rather than crude.
This means → the "natural decline" in global crude supply is more severe than headline numbers suggest, raising the urgency to accelerate exploration and deepwater investment.
Goldman names 15 winners — what got them on the list?
From an analysis of 516 projects at a flat Brent price of $68/bbl, Goldman identified 15 companies with a combined edge in growth and profitability.
Among majors, Total, Exxon, and Conoco lead. Mid-caps and emerging players include ENI, Galp, Repsol, Diamondback, Cheniere, Cenovus, Ovintiv, Santos, Petrobras, YPF, and Vista Energy.
Standouts: Galp holds the longest reserve life among European peers; ExxonMobil leads U.S. majors on Permian and Guyana production growth; Vista and YPF, anchored by Vaca Muerta assets, are the top emerging-market winners on project quality.
Content is for reference only, not financial advice.