Replacement of Reserves

abarrelfull wrote on 19 Feb 2010 10:05
Tags: apache exxon marathon reserves

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Whilst the world worries about peak oil, it is obvious that some companies have more to worry about than others.

Exxon, as usual is sitting pretty.

Exxon Mobil Corporation announced today that additions to its proved reserves in 2009 totaled 2.0 billion oil-equivalent barrels, replacing 133 percent of production.

And its not just the big boys, the smaller integrated companies can manage it as well.

Marathon Oil Corporation (NYSE: MRO) announced that during 2009, the Company added net proved liquid hydrocarbon and natural gas reserves of 674 million barrels of oil equivalent (mmboe), excluding dispositions of 41 mmboe, while producing 149 mmboe, and thereby increasing proved reserves by over 40 percent from 1,195 mmboe at year end 2008 to 1,679 mmboe at year end 2009.

The independents are not too bad either.

Apache ended 2009 with proved reserves of 2.37 billion barrels of oil equivalent. The company added 216 million barrels of oil equivalent (MMboe) through discoveries, extensions and acquisitions but excluding price-related downward revisions. Apache’s 2009 production was 213 MMboe.

All three have at least replaced their reserves. So what does this show?

First, not very much, because even Exxon, the biggest sister of all is insignificant in global terms.

Secondly however, I think it might give us a clue into why we are in the position where global reserves are falling. State Ownership. Private companies are punished by investors if they fail to replace reserves, whereas state owned companies have every incentive to run reserves down, ansd spend the money today. Global oil supply would be much more secure if politicians got out of the way.

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