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Exxon slashed its oil reserves by almost a third in what is the most radical reserve revision in the company’s modern history.
The supermajor reported reserves totaling 15.3 billion barrels as of the end of 2020 in a regulatory filing, cited by Bloomberg. This compared with 22.44 billion barrels a year earlier.
The biggest chunk of “deleted” assets came from Canadian oil sands: Exxon removed almost all of its oil sands holdings from its books as of the end of last year. This, however, does not mean they are gone forever.
“Among the factors that could result in portions of these amounts being recognized again as proved reserves at some point in the future are a recovery in the SEC price basis, cost reductions, operating efficiencies, and increases in planned capital spending,” Exxon said in its filing.
Exxon, which earlier this year reported its first annual loss in four decades because of the pandemic, has, like its peers, re-prioritized its operations, focusing on high-return assets such as the Permian and Guyana, where Exxon has been making discovery after discovery. Meanwhile, it has been shedding what it considers non-essential assets.
The latest update in this respect was this week’s announcement Exxon would sell its production assets in the UK’s central and northern North Sea for a total of over $1 billion. The buyer was a private equity firm, Hitec Vision.
“We continue to high-grade our portfolio by divesting assets that are less strategic and focusing our investments on our advantaged projects that are among the best in the industry,” Neil Chapman, senior vice president of ExxonMobil, said.
“Our development plans that prioritize Guyana, the U.S. Permian Basin, Brazil and LNG are focused on increasing earnings potential and generating strong cash flow to fund future capital investments, reduce debt and maintain a reliable dividend.”
