Morgan Stanley performed a bottom-up assessment of production profiles across approximately 4,000 oil and gas fields to evaluate the growth prospects of major European energy companies through 2030. The bank's compilation, which drew on data from multiple consultants, indicates an improved picture for the sector's near-term production trajectory.
The firm projects aggregate production growth for the European majors at 2.9% annually for the 2025-2030 period, a notable increase from the 1.2% annual growth implied in last year’s forecast. In addition, Morgan Stanley reports that rolling four-year forward production for the group has expanded by 8.3% relative to prior projections.
Among the companies covered, Eni is singled out as having the most robust production runway. Morgan Stanley's modelling points to projected production growth of 4.5% through 2030 for Eni, and the bank notes that further increases are expected beyond that horizon through 2034.
By contrast, Equinor is identified as facing the largest production-growth challenges within the studied peer set. The research highlights a divergence in company-level outlooks despite the sector-wide improvement in the aggregated metrics.
On the equity side, Morgan Stanley has upgraded Shell to an Overweight rating and designated it a Top Pick. The firm assigns an expected total shareholder return of 15% for Shell and anticipates significant acceleration in dividends per share following recent operational and business improvements.
The bank also maintains an Overweight rating on BP. Its rationale includes expectations that BP will reduce net debt faster than the company has targeted, an appealing valuation level, and several potential catalysts that could support the investment case.
Methodologically, the research is based on detailed, bottom-up production data sourced from multiple data consultants, which Morgan Stanley used to map out field-level flows and aggregate those into company-level production outlooks. That approach underpins the bank's comparative view of the majors' near- to medium-term growth trajectories.
Implications - The findings suggest a healthier production growth backdrop for European oil majors in the latter half of this decade, with material differences across companies that could influence investor preference and capital allocation decisions.