Exxon, Chevron May Lift Green Capex 50%, Morgan Stanley Says

Analysts at Morgan Stanley expect Exxon Mobil Corp. and Chevron Corp. to raise their low-carbon capital spending 50% above current plans due to the recently-passed Inflation Reduction Act.

The IRA creates a “profitable transition” pathway for the US oil majors, which are well-placed to benefit from tax incentives for carbon capture and hydrogen, the bank said in a note. Previously, Morgan Stanley ascribed no direct value to their new energy businesses “due to uncertainty around returns.”

But with the IRA tax breaks, the companies should be able to achieve annual returns of 15%, encouraging them to significantly raise their non-fossil ...