Moody's upgrades global oil E&P to stable, earnings to recover

E&P spending is tracking a 40%-50% decline in 2020, and will continue at a low level in 2021 without higher prices. Companies will use excess cash flow to pay down debt and maximise shareholder returns before increasing capital spending.

KUALA LUMPUR: Moody's Investors Service has changed its outlook for the global exploration and production (E&P) sector to stable from negative, with earnings set to recover slowly into 2021.

It said in a statement on Friday that earnings before interest, tax, depreciation and amortisation (Ebitda) will rise by about 5% for E&P companies between mid-2020 and mid-2021 as oil prices post a modest increase.