The consistency of oil and gas upstream investment with energy transitions is receiving increasing policy and investor attention. This paper provides a comprehensive assessment of the state of play of upstream oil and gas investment. Cyclical developments, primarily the oil price declines unfolding in 2015–2016, appear to have had a stronger impact on upstream investment activity than the Paris Agreement and the associated prospect of policy-driven demand declines. Nevertheless, all the major changes unfolding since 2015, namely the reduction of overall investment spending, the stronger management of investment costs and the reallocation from high capital intensity, long lead time projects towards smaller, modular short-cycle developments, also positions the industry towards energy transitions. Even under stringent climate policy assumptions, field development investment will be necessary to satisfy demand. Given the current structure of investment and the financing strategies emphasizing retained earnings-based investment, the stranded asset exposure on an energy transition pathway is manageable.