Exxon Mobil Corp
The new guidance in Exxon's annual report, issued on Friday, compares with the previous capital expenditure range of $33 billion to $37 billion. Actual capital and exploration expenditure in 2011 was $36.8 billion.
The corporation anticipates an investment profile of about $37 billion per year for the next several years, Exxon said. Actual spending could vary depending on the progress of individual projects.
Smaller rival Chevron Corp
Royal Dutch Shell Plc
Indicators of cost inflation in the energy business were easy to spot this week, with deepwater driller Ensco Plc
Exxon, Shell and Chevron all have large natural gas projects in development in Australia, as well as ambitious plans for deepwater drilling.
Finding oil is going to become a more costly enterprise,
said Michael Yoshikami of YCMNET Advisors, a Walnut Creek, California-based fund that owns Exxon and Chevron shares. They're making a bet on higher long-term oil prices.
And that looks like a fairly safe bet in the next few years, he added, barring an unlikely global recession.
Not having to worry about short-term fluctuations is where the world's largest oil companies have an advantage, given their size.
Due to its financial strength, debt capacity and diverse portfolio of opportunities, Exxon said, the risk associated with failure or delay of any single project would not have a significant impact on the corporation's liquidity or ability to generate sufficient cash flows for operations and its fixed commitments.
But the 2011 well statistics in Exxon's annual report offered a glimpse of the challenges involved in finding new resources. The total number of productive exploratory wells fell to 23 from 35 in 2010, while the dry wells figure rose to 11 from 7 the year before.
(Reporting by Braden Reddall in San Francisco; Editing by Bernard Orr and Tim Dobbyn)