The "Big Six" -- ExxonMobil Corp., BP plc, Royal Dutch Shell, Chevron Corp., ConocoPhillips and Total -- spent a record $63 billion on share repurchases and $35 billion more in dividends in 2006, according to a study by consulting firm John S. Herold Inc.

The six oil majors returned 53% of cash flow to shareholders, up from a five-year average of 45%.

"For every dollar invested in upstream, downstream, and chemical capital projects, the Big Six sent back 90 cents to shareholders" in 2006, said Herold CEO Art Smith. "However, the level of cash flow returned ranged from 82% and 74% for BP and ExxonMobil, respectively, to just 14% for ConocoPhillips, as it completed its acquisition of Burlington Resources and augmented its stake in Lukoil."

All six companies have increased their dividends for 2007. According to Herold, the majors' boards "feel more comfortable that energy prices will stay high and underpin the higher payouts in the long-term." However, the study noted that lower free cash flow numbers could mean that share repurchases may not set another record this year.

Herold is forecasting relatively stable cash flows in 2007, with London-based BP expected to record the largest gain. However, dollars available after capital expenditures and dividend payments to shareholders are projected to fall this year for all but BP and Houston's ConocoPhillips. According to the study, excess cash peaked for Chevron and Total in 2005 and for Shell and ExxonMobil in 2006.

This year, Herold is forecasting capital spending for the group to be mixed. Double-digit year-over-year capital spending is projected at BP and Chevron, with more moderate increases for ConocoPhillips and Total. ExxonMobil's spending is expected to be flat, and Shell's spending is expected to slightly decline. On balance, the companies appear to be maintaining the "disciplined approach" to investing in new projects, the study noted.

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