HUGE OIL NEED in OIL RECOVERY! NOTE:
www.energyglobalnews.com/oil-and-gas-proven-reserves-of-major-companies-are-falling-at-alarming-rate/
OIL AND GAS PROVEN RESERVES OF MAJOR COMPANIES ARE FALLING AT ALARMING RATE
May 20, 2021
The proven oil and gas reserves of the group of major companies called “Big Oil” are falling at an alarming rate, as produced volumes are not being fully replaced with new discoveries. A Rystad Energy analysis shows that Big Oil lost 15% of its stock levels in the ground last year, with remaining reserves set to run out in less than 15 years – unless the group makes more commercial discoveries, and fast.
The task is becoming more and more challenging as investments in exploration shrink and success rates slump. The declining proven reserves could create serious challenges for Big Oil (ExxonMobil, BP, Shell, Chevron, Total and Eni) to maintain stable production levels in coming years. This would in turn cause revenue to dwindle and pose a major threat to the financing of the group’s energy transition plans.
Big Oil saw its proven reserves drop by 13 billion barrels of oil equivalent (boe) in 2020 as the companies took large impairment charges, and this year’s exploration has not come off to a great start either. The industry’s global first-quarter discovered volumes totaled 1.2 billion, the lowest in seven years, as high-ranked prospects failed to deliver and successful wildcats only yielded modest-sized finds.
The collapse in crude oil demand and prices due to the Covid-19 pandemic and an increased focus on capital discipline has led to investment cuts that could aggravate the challenge of many major operators as they strive to boost their proven reserves. Even for European majors, which are increasingly focusing on the energy transition, business models will continue to be dominated by the sale of oil and gas.
“The ability of Big Oil to generate future revenues will continue to depend on the volume of oil and gas the companies have at their disposal to sell. If reserves are not high enough to sustain production levels, companies will find it difficult to fund expensive energy transition projects, resulting in a slowdown of their clean energy plans,“ says Parul Chopra, vice president of upstream research at Rystad Energy.
• ExxonMobil’s proven reserves shrank by 7 billion *(BOE) in 2020, or 30%, from 2019 levels. This was mainly due to reductions in Canadian oil sands and US shale gas properties. ExxonMobil’s proven reserves of liquids in Canada were revised from 4.8 billion barrels of oil to less than 900 million barrels, while bitumen-related reserves for the Kearl and Cold Lake oil sands projects were slashed from 3.8 billion barrels to less than 100 million barrels. In addition, liquid reserves related to some US shale plays have been reduced by 1 billion barrels.
• Shell saw its proven reserves fall by 20% to 9 billion BOE last year. Liquid reserves accounted for one-third of total reductions and were mostly down to US and South American projects, and a lack of new discoveries elsewhere. Gas reserves accounted for two-thirds of the reductions, led by a 600 million BOE revision in Australian projects.
*Barrel of Oil Equivalent (BOE) Definition - Investopediahttps://www.investopedia.com › Commodities › Oil
A barrel of oil equivalent (BOE) is a term used to summarize the amount of energy that is equivalent to the amount of energy found in a barrel of crude oil. By encompassing different types of energy resources into one figure, analysts, investors, and management can assess the total amount of energy the firm can access.
www.energyglobalnews.com/oil-and-gas-proven-reserves-of-major-companies-are-falling-at-alarming-rate/
OIL AND GAS PROVEN RESERVES OF MAJOR COMPANIES ARE FALLING AT ALARMING RATE
May 20, 2021
The proven oil and gas reserves of the group of major companies called “Big Oil” are falling at an alarming rate, as produced volumes are not being fully replaced with new discoveries. A Rystad Energy analysis shows that Big Oil lost 15% of its stock levels in the ground last year, with remaining reserves set to run out in less than 15 years – unless the group makes more commercial discoveries, and fast.
The task is becoming more and more challenging as investments in exploration shrink and success rates slump. The declining proven reserves could create serious challenges for Big Oil (ExxonMobil, BP, Shell, Chevron, Total and Eni) to maintain stable production levels in coming years. This would in turn cause revenue to dwindle and pose a major threat to the financing of the group’s energy transition plans.
Big Oil saw its proven reserves drop by 13 billion barrels of oil equivalent (boe) in 2020 as the companies took large impairment charges, and this year’s exploration has not come off to a great start either. The industry’s global first-quarter discovered volumes totaled 1.2 billion, the lowest in seven years, as high-ranked prospects failed to deliver and successful wildcats only yielded modest-sized finds.
The collapse in crude oil demand and prices due to the Covid-19 pandemic and an increased focus on capital discipline has led to investment cuts that could aggravate the challenge of many major operators as they strive to boost their proven reserves. Even for European majors, which are increasingly focusing on the energy transition, business models will continue to be dominated by the sale of oil and gas.
“The ability of Big Oil to generate future revenues will continue to depend on the volume of oil and gas the companies have at their disposal to sell. If reserves are not high enough to sustain production levels, companies will find it difficult to fund expensive energy transition projects, resulting in a slowdown of their clean energy plans,“ says Parul Chopra, vice president of upstream research at Rystad Energy.
• ExxonMobil’s proven reserves shrank by 7 billion *(BOE) in 2020, or 30%, from 2019 levels. This was mainly due to reductions in Canadian oil sands and US shale gas properties. ExxonMobil’s proven reserves of liquids in Canada were revised from 4.8 billion barrels of oil to less than 900 million barrels, while bitumen-related reserves for the Kearl and Cold Lake oil sands projects were slashed from 3.8 billion barrels to less than 100 million barrels. In addition, liquid reserves related to some US shale plays have been reduced by 1 billion barrels.
• Shell saw its proven reserves fall by 20% to 9 billion BOE last year. Liquid reserves accounted for one-third of total reductions and were mostly down to US and South American projects, and a lack of new discoveries elsewhere. Gas reserves accounted for two-thirds of the reductions, led by a 600 million BOE revision in Australian projects.
*Barrel of Oil Equivalent (BOE) Definition - Investopediahttps://www.investopedia.com › Commodities › Oil
A barrel of oil equivalent (BOE) is a term used to summarize the amount of energy that is equivalent to the amount of energy found in a barrel of crude oil. By encompassing different types of energy resources into one figure, analysts, investors, and management can assess the total amount of energy the firm can access.
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