Oil Majors Fail To Find Reserves To Counter Falling Output
LONDON, Feb 5 (Reuters) – Big oil companies had a poor record of finding and producing oil and gas last year, according to figures out in the past week – and big cuts in spending in response to falling crude prices could undermine their plans to turn that around.
Four of the world's six biggest oil firms by market value – Royal Dutch Shell, Chevron, BP and ConocoPhillips – released provisional figures showing together they replaced only two-thirds of the hydrocarbons they extracted in 2014 with new reserves.
Combined, those four and industry leader Exxon Mobil posted an average drop in oil and gas production of 3.25 percent last year.
All predict their output will increase and new reserves will be added in coming years. But the 2014 results echo longer-term trends.
Over the past decade, the biggest Western oil companies have seen reserves growth stall, production drop 15 percent and profits fall by almost a fifth – even as oil prices almost doubled, a Reuters analysis of corporate filings shows.
Analysts and industry executives have blamed the sector's anaemic performance in that period, in part, on companies' approach to spending on new fields and infrastructure, tending to ramp it up when oil prices rise and cut when prices plummet, such as in the late 1990s and after the 2008 financial crisis.
The latest collapse has seen prices halve since June. In recent months, the biggest oil groups on both sides of the Atlantic have announced sharp cuts in capital expenditure (capex) out as far as 2017, as they seek to preserve cash to maintain dividends.
View Full Article
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- BP Buys 61 Percent Stake In Azerbaijan's Gobustan Onshore Project
- Prices For November Soften After Earlier Strong Weeks
- China's Sinopec Plans To Build Canadian Oil Refinery
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three