In recent years, the environmental, social, and governance (ESG) movement has reshaped the investment landscape for the oil and gas industry. While ESG criteria often cast fossil fuels in a negative light, making them nearly uninvestable for many funds, this pressure inadvertently imposed a much-needed financial discipline on Big Oil. As outlined in a recent opinion piece by Javier Blas, this discipline—characterized by slashed capital expenditures, depressed valuations, and a laser focus on shareholder returns—created significant benefits for investors who stayed the course.
It is interesting to note that BlackRock’s CEO has requested that the term “ESG” not be used in earnings reports, and the oil and gas companies have taken the Governance and Environment part of ESG to heart. The Social or “Woke” part of ESG needs to be removed from the boardroom. Being a good Steward of the planet and not discriminating against employees and business practices should be part of the governance process.
Companies redirected cash flows away from ambitious expansion projects and toward dividends, share buybacks, and debt reduction, leading to higher commodity prices and stronger returns over time. The irony is clear: ESG’s ostracism of the sector forced Big Oil to operate more efficiently, turning what could have been a liability into a boon for shareholders. With ESG’s influence waning amid shifting political priorities and market realities, the industry may soon miss this enforced restraint.
To illustrate these benefits, let’s examine the latest Q2 2025 earnings reports from the top 10 global oil and gas companies by market capitalization. These firms have collectively demonstrated robust earnings and substantial returns to shareholders, underscoring how ESG-driven discipline has paid off.
The Top 10 Oil and Gas Giants: A Snapshot of Q2 2025 Performance
The top 10 companies, ranked by market cap as of mid-2025, include a mix of state-owned behemoths and integrated majors.
Their Q2 results highlight steady profits despite fluctuating oil prices, with a strong emphasis on returning capital to investors through dividends and buybacks. This approach stems directly from the ESG era’s push for fiscal conservatism, where low valuations (like ExxonMobil’s rock-bottom multiples in 2020) compelled firms to prioritize efficiency over growth.
Here’s a comparative overview of their key financial metrics from Q2 2025:Company.
|
Company
|
Market Cap (Approx., USD)
|
Q2 2025 Net Earnings (USD)
|
Returns to Shareholders (Q2 or YTD 2025)
|
Key Notes
|
|---|---|---|---|---|
|
1. Saudi Aramco
|
$1.55 Trillion
|
$22.67 Billion
|
$21.3 Billion (dividends: $21.1B base + $0.2B performance-linked)
|
Focused on massive dividends; no major buybacks reported. |
|
2. ExxonMobil
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$458 Billion
|
$7.1 Billion
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$9.2 Billion (Q2: $4.3B dividends + $5B buybacks); YTD: $18.4B
|
On track for $20B annual buybacks, emphasizing capital discipline. |
|
3. Chevron
|
$306 Billion
|
$2.5 Billion (adjusted $3.1B)
|
$5.5 Billion (Q2: $2.9B dividends + $2.6B buybacks)
|
Record output supports ongoing high returns; 13th straight quarter over $5B payouts. |
|
4. Shell
|
$210 Billion
|
$4.26 Billion
|
$3.5 Billion (buybacks); $3.6B income to shareholders
|
Completed prior buybacks; new $3.5B program amid profit beat. |
|
5. TotalEnergies
|
$136 Billion
|
$3.6 Billion (adjusted)
|
$1.5 Billion (Q4 buybacks planned); Full-year buybacks ~$6B est.; Dividends €0.85/share
|
Adjusted buyback pace for energy transition; robust cash flow of $6.6B. |
|
6. BP
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$95 Billion
|
$2.4 Billion
|
Dividend: 8.32 cents/share (4% increase); $0.75B buyback completed
|
Committed to resilient dividends and buybacks despite underperformance in shares. |
|
7. PetroChina
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$217 Billion
|
Exceeded expectations (H1 details in interim report)
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Interim dividend declared; Yield ~7.2%
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Strong EPS and revenue; dividends well-covered by earnings. |
|
8. ConocoPhillips
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$128 Billion
|
Earnings per share $1.56 (adjusted $1.42)
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$2.2 Billion (Q2: $1B dividends + $1.2B buybacks); 2025 plan: $10B total
|
Plans $6B buybacks in 2025; focus on free cash flow growth. |
|
9. Equinor
|
$70 Billion (est.)
|
$1.67 Billion (net); $6.53B adjusted op. income
|
Dividend $0.37/share; Up to $1.265B buyback (third tranche)
|
Total 2025 capital distribution: $9B, including buybacks up to $5B. |
|
10. Eni
|
$50 Billion (est.)
|
€1.7B EBIT
|
2025 plan: €1.05/share dividend (5% increase) + €1.5B buyback
|
Confirmed returns amid lifted cash-flow guidance. |
These figures reveal a sector-wide trend: even as oil prices softened in Q2 2025, earnings remained solid, and shareholder returns were prioritized. Collectively, these top players returned tens of billions to investors in just one quarter, a direct outcome of ESG-imposed frugality. For instance, during the height of ESG scrutiny (2018–2022), companies like BP and Shell curbed production growth, which limited supply and supported higher prices—benefiting long-term investors.
How ESG Discipline Translated to Investor Gains
The financial discipline enforced by ESG wasn’t just about cutting costs; it created a “once-in-a-lifetime buying opportunity” for contrarians.
Valuations plummeted—Exxon traded at just 0.65 times tangible book value in 2020—forcing executives to rethink strategies. Instead of pouring money into high-risk projects, firms like Chevron and ConocoPhillips ramped up buybacks and dividends, enhancing per-share value. This shift has paid off handsomely: industry-leading cash flows have funded these distributions without compromising balance sheets.
Moreover, the focus on returns has insulated Big Oil from volatility. Despite a 10–15% drop in profits for some due to lower oil prices, cash generation remained strong, enabling continued payouts.
In a post-ESG world, however, Blas warns that rising valuations could erode this discipline, potentially leading to overinvestment and weaker returns.
Looking Ahead: Will Big Oil Maintain the Momentum?
As ESG fades—evidenced by anti-ESG legislation in the U.S. and a renewed focus on energy security—Big Oil stands at a crossroads.
The sector’s recent performance shows clear benefits from the discipline it imposed, but without external pressure, the temptation to chase growth could return. For now, investors in these top companies continue to reap rewards, with yields and buybacks signaling confidence in a resilient future.In summary, ESG may have been “terrible for the fossil fuel industry” but “great for investors,” as Blas aptly puts it.
The Q2 2025 results from the top 10 underscore this legacy, proving that enforced prudence can turn challenges into opportunities.
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