Eni to Lead European Oil Majors in Production Growth, Morgan Stanley Says

Italian energy major Eni is poised to lead its European peers in production growth through the end of the decade, according to a new analysis by Morgan Stanley. In its report, the investment bank also upgraded Shell to Overweight and designated it a "Top Pick," signaling a constructive view on the sector's outlook.

Eni Leads the Pack

Morgan Stanley's research, which was based on bottom-up data from approximately 4,000 oil and gas fields, projects that Eni will achieve production growth of 4.5% annually through 2030. The firm noted that further increases are expected for the company through 2034.

In contrast, the analysis identified Norway's Equinor as facing the largest challenges in production growth among the group. The report found that the aggregate production growth outlook for the European majors has improved significantly, rising to 2.9% annually for the 2025-2030 period, up from a 1.2% forecast in the prior year's analysis.

Analyst Ratings and Upgrades

Beyond the production forecasts, Morgan Stanley made key changes to its stock ratings within the sector:

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• Shell: Upgraded to Overweight and named a Top Pick. The bank projects a potential 15% total shareholder return, citing expectations for a "significant dividend per share acceleration" following recent business improvements.
• BP: Maintained at an Overweight rating. Analysts pointed to an attractive valuation, multiple potential catalysts, and the expectation that BP will reduce its net debt faster than its own stated targets.

What It Means for Investors

Production growth is a critical driver of revenue and free cash flow for integrated energy companies, directly impacting their ability to fund capital expenditures and return cash to shareholders. Morgan Stanley's field-level analysis provides a granular, forward-looking view of the operational health of these companies.

The improved sector-wide growth forecast suggests a more robust medium-term supply outlook from European majors. For investors, such analyst ratings and detailed production forecasts can influence market sentiment and are key inputs for evaluating the relative strengths and weaknesses within the energy sector.