Trends of 6 Oil Majors

Preamble

Economists and energy analysts are divided as to whether the passing of a peak in global oil production is a present reality or is so far ahead that its occurrence can be discounted.

We are also being persuaded that our near energy requirements can be met by the successful development of tight oil and shale gas, the reserves of which it is argued are universally spread over the world. The technology of “fracturing” or “fracking” is under rapid deployment in the US. Tight oil from the Bakken and Eagle Ford shales has provided competition for diluted bitumen imported from the Canadian tarsands, while shale gas has largely replaced the importing of LNG into the US and plans are laid to export LNG. However, fracked well production falls off rapidly and overall play production can only be maintained by an increasing drilling of new wells

Because natural gas can be used to sythesise liquid fuels and chemicals it has been assumed that it has a “oil equivalent” and this has been variously evaluated by a comparison of the heating values of oil and gas. Conversion values of between 5,500 and 6,000 cubic feet (cf) of gas are assumed to be equivalent to a barrel of crude oil (boe).

In the annual reports of the six major oil companies selected for analysis, all have presented their combined production of oil and gas in barrels of oil equivalent, while presenting their figures for natural gas production in billions of cubic feet or metres (bcf or bcm). Some have given figures for reserves only in barrels of oil equivalent, without distinguishing between the size of oil and gas reserves. 

Annual Reports

Sixty-six annual reports have been studied and a series of tables constructed, with volumetric gas figures presented as billions of barrels of oil equivalents (Gboe) by applying the conversion ratios or by subtraction of billions barrels of oil (Gb) from the totals of barrels of oil equivalents (Gboe).

Using spreadsheet formulae the aggregate values of the six majors are presented in a seventh table entitled All

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
BP
Reserves
Liquids Gb 9.93 9.57 9.78 10.07 10.35 10.51 10.71 10.57 10.05 10.07 9.82
Gas Gboe 8.36 8.33 7.92 7.74 7.78 7.36 7.36 7.15 6.95 7.93 7.71
Total Gboe 18.30 17.89 17.70 17.81 18.13 18.07 18.07 17.72 17.00 18.00 17.52
Production
Oil Gb 0.924 0.935 0.903 0.935 0.876 0.925 0.867 0.787 0.750 0.735 0.703
Gas Gboe 0.535 0.530 0.530 0.553 0.523 0.523 0.528 0.474 0.466 0.444 0.447
Total Gboe 1.46 1.47 1.43 1.49 1.39 1.46 1.40 1.26 1.22 1.18 1.15
Reserves/Production
Oil 10.8 10.2 10.8 10.8 11.8 11.4 12.4 13.4 13.4 13.7 14.0
Gas 15.6 15.7 14.9 14.0 14.9 14.6 13.9 15.1 14.9 17.9 17.2
All 12.5 12.2 12.4 12.0 13.0 12.5 13.0 14.1 15.3 15.3 15.2
Chevron
Reserves
Liquids Gb 7.790 8.000 7.810 7.090 7.350 6.970 6.500 6.460 6.481 6.345 6.249
Gas Gboe 3.280 3.910 3.810 3.690 3.850 4.340 4.040 4.780 4.866 4.866 4.853
Total Gboe 11.25 11.91 11.60 10.78 11.20 11.31 10.54 11.24 11.35 11.20 11.102
Production
Oil Gb 0.624 0.609 0.632 0.641 0.602 0.674 0.702 0.675 0.644 0.632 0.624
Gas Gboe 0.292 0.310 0.341 0.315 0.312 0.303 0.307 0.301 0.309 0.316 0.314
Total Gboe 0.916 0.919 0.973 0.956 0.910 0.977 1.010 0.976 0.953 0.948 0.938
Reserves/Production
Oil 12.5 13.1 12.4 11.1 12.2 10.3 9.3 9.6 10.1 10.0 10.01
Gas 11.2 12.6 11.2 11.7 12.3 14.3 13.2 15.9 15.7 15.4 15.46
All 12.3 13.0 11.9 11.3 12.3 11.6 10.4 11.5 11.9 11.8 11.84
Conoco/Phillips
Reserves
Liquids Gb 3.80 4.68 5.51 4.90 4.49 5.30 4.30 4.19 5.36 5.52 5.49
Gas Gboe 3.81 4.68 5.66 4.91 5.49 5.03 4.01 4.20 3.28 3.40 3.42
Total Gboe 7.61 9.36 11.17 9.81 9.98 10.33 8.31 8.39 8.64 8.92 8.91
Production
Oil Gb 0.330 0.371 0.404 0.358 0.337 0.353 0.333 0.290 0.320 0.320 0.322
Gas Gboe 0.233 0.289 0.457 0.448 0.322 0.324 0.306 0.300 0.250 0.250 0.242
Total Gboe 0.563 0.660 0.861 0.806 0.660 0.677 0.639 0.590 0.560 0.560 0.562
Reserves/Production
Oil 11.52 12.61 13.64 13.69 13.32 15.01 12.91 14.45 16.75 17.25 17.05
Gas 16.35 16.19 12.39 10.96 17.05 15.52 13.10 14.00 13.12 13.60 14.12
All 13.52 14.18 12.97 12.17 15.12 15.26 13.00 14.22 15.43 15.93 15.85
ExxonMobil
Reserves
Liquids Gb 11.65 11.23 11.57 11.07 12.01 11.65 11.67 12.20 12.60 13.36 13.71
Gas Gboe 10.06 11.15 11.26 11.38 10.98 11.33 13.14 12.70 12.60 11.84 11.56
Total Gboe 21.71 22.38 22.83 22.45 22.99 22.99 24.81 24.90 25.20 25.20 25.27
Production
Oil Gb 0.935 0.917 0.976 0.953 0.879 0.870 0.883 0.844 0.797 0.804 0.770
Gas Gboe 0.656 0.622 0.622 0.625 0.606 0.616 0.791 0.801 0.750 0.720 0.679
Total Gboe 1.59 1.54 1.60 1.58 1.49 1.49 1.67 1.65 1.55 1.52 1.45
Reserves/Production
Oil 12.5 12.2 11.9 11.6 13.7 13.4 13.2 14.5 15.8 16.6 17.81
Gas 15.3 17.9 18.1 18.2 18.1 18.4 16.6 15.9 16.8 16.5 17.02
All 13.6 14.5 14.3 14.2 15.5 15.5 14.8 15.1 16.3 16.5 17.44
Shell
Reserves
Liquids Gb 4.888 4.636 4.189 3.789 3.431 5.687 6.146 6.032 5.972 6.192 6.119
Gas Gboe 6.994 6.830 7.611 8.141 7.472 8.445 8.127 8.218 7.584 7.740 6.951
Total Gboe 11.88 11.47 11.80 11.92 10.90 14.13 14.25 14.25 13.60 13.93 13.07
Production
Oil Gb 0.793 0.729 0.711 0.693 0.619 0.577 0.591 0.610 0.597 0.537 0.542
Gas Gboe 0.554 0.520 0.557 0.517 0.541 0.570 0.619 0.563 0.597 0.631 0.582
Total Gboe 1.35 1.25 1.27 1.21 1.16 1.15 1.21 1.17 1.19 1.17 1.12
Reserves/Production
Oil 6.2 6.4 5.9 5.5 5.5 9.9 10.4 9.9 10.0 11.5 11.3
Gas 12.6 13.1 13.7 15.7 13.8 14.8 13.1 14.6 12.7 12.3 11.9
All 8.8 9.2 9.3 9.9 9.4 12.3 11.8 12.1 11.4 14.1 11.6
Total
Reserves
Liquids Gb 7.003 6.590 6.470 5.778 5.695 5.689 5.987 5.784 5.686 5.413 5.303
Gas Gboe 4.415 4.145 4.649 4.671 4.763 4.794 4.708 5.635 5.682 6.113 6.220
Total Gboe 11.15 11.15 11.12 10.45 10.46 10.48 10.70 11.42 11.37 11.53 11.52
Production
Oil Gb 0.619 0.592 0.550 0.551 0.531 0.504 0.489 0.447 0.447 0.426 0.377
Gas Gboe 0.325 0.318 0.310 0.322 0.324 0.328 0.379 0.409 0.392 0.413 0.406
Total Gboe 0.944 0.908 0.860 0.873 0.855 0.832 0.868 0.856 0.839 0.840 0.783
Reserves/Production
Oil 11.3 11.1 11.8 10.5 10.7 11.3 12.2 12.9 12.7 12.7 14.1
Gas 13.6 13.0 15.0 14.5 14.7 14.6 12.4 13.8 14.5 14.8 15.3
All 11.8 12.3 12.9 12.0 12.2 12.6 12.3 13.3 13.6 13.7 14.7
All
Reserves
Liquids Gb 49.208 49.266 49.979 47.369 48.091 50.597 50.026 50.872 51.833 53.017 52.913
Gas Gboe 32.504 34.900 36.261 35.861 35.572 36.505 36.677 37.048 35.280 35.772 34.487
Total Gboe 71.371 73.602 75.650 73.321 73.731 77.334 76.469 76.947 76.237 77.678 76.244
Production
Oil Gb 4.225 4.153 4.176 4.131 3.844 3.903 3.865 3.653 3.555 3.454 3.338
Gas Gboe 2.595 2.589 2.817 2.780 2.628 2.664 2.930 2.848 2.764 2.774 2.670
Total Gboe 6.821 6.746 6.992 6.913 6.460 6.583 6.792 6.505 6.309 6.218 6.006
Reserves/Production
Oil 11.6 11.9 12.0 11.5 12.5 13.0 12.9 13.9 14.6 15.3 15.9
Gas 12.5 13.5 12.9 12.9 13.5 13.7 12.5 13.0 12.8 12.9 12.9
All 10.5 10.9 10.8 10.6 11.4 11.7 11.3 11.8 12.1 12.5 12.7

 

From this aggregation of the six results it is evident that their combined crude oil production has declined from  Gb 4.225 in 2004 to Gb 3.338 in 2014, a fall of 21%.

Their combined natural gas production has risen from Gboe 2.595 in 2004 to Gboe 2.670 in 2014, a rise of 3%.

This has meant that their total production in Gboe has fallen from Gboe 6.820 in 2004 to Gboe 6.006 in 2014, a fall of 12% over the ten years.
   

Combined trends

 

Oil equivalents

The attribution of comparative heating values to evaluate an oil equivalent of natural gas is only valid when the oil and gas are used for heating.

If the natural gas is transported as LNG, then there is a heating value penalty of 15% or so, depending on the energy used for cleaning up the gas prior to liquefaction, the liquefaction and transportation and eventual regasification and its transmission.

If the natural gas is used to synthesise liquid fuels, then there is a heating value penalty of around 50%.

Some oil production figures include bitumen derived from tarsands. As there is a 30% energy loss in its conversion to synthetic crude oil (SCO), there is a need for its conventional oil equivalent to be discounted.

Gas takes more of a proportion of the oil equivalent production claimed by the majors. As the proportion of SCO upgraded from bitumen and from gas-to-liquids (GTL) processes increases, so the total barrels of oil equivalent should be marked down to compensate for the contribution of gas needed to upgrade the bitumen and that lost in in the GTL processes. Otherwise some gas is double booked..

Company peaks

Exxon Mobil had its company oil peak in 2006, BP its in 2005, Shell before 2004, Total before 2004, ConocoPhillips in 2006 and Chevron in 2010.  

Conclusions

This analysis of company annual reports in regard to oil and gas production has been conducted from the published annual reports of the six oil majors. Institutional reports rely on national statistics which are subject to political interference and delay, but annual reports are audited and the production figures correspond to the revenue they produce. Nevertheless the amounts claimed as barrels of oil equivalent need to be subjected to regulatory scrutiny, as the various end uses and processes involved should be taken into account. The presented figures for natural gas oil equivalents should be downgraded accordingly.

It can also be noted that the six oil majors selected for examination are slowly progressing to gas majors, while their combined oil production peaked before 2004. It is difficult to reconcile current claims that an oil peak is far away and that global oil production will rise to meet an increasing demand, while the arrival of tight oil in the US has made no measurable impact on the radical falling in crude oil production of the six major oil companies analysed.

© John Busby 23 May 2015