[Graeme]

'Big oil' getting smaller as production keeps falling

* Top seven western majors all seeing liquids output fall
* Supermajors' share of global market dropping every year
* BP reports fastest decline of 30% from 2009-13
* Production becoming more evenly split between oil and gas

The biggest western oil companies are continuing to see their oil output decline, despite record investment in recent years spurred by sustained crude prices in excess of $100/barrel, according to data released by the companies.

Furthermore, with total world oil output continuing to rise every year, the western majors are seeing their share of the global market fall even faster, with new volumes coming largely from their rivals in places like Russia and a host of smaller companies at the heart of the shale oil boom in the US.

Combined output of crude and other liquids by the seven biggest western majors -- ExxonMobil, Shell, BP, Chevron, Total, ConocoPhillips and Eni -- amounted to 9.517 million b/d last year, down 2.2% from 2012 and marking the fourth consecutive year of decline.

Liquids output from the same group has been falling every year of late, having been as high as 10.865 million b/d in 2009.

As a group, the seven have seen their combined liquids output fall by 1.348 million b/d, or 12.4% over the period from 2009 to 2013.

The most notable contribution to the overall decline comes from BP, whose production of oil and other liquids has fallen by more than 30% from 1.695 million b/d in 2009 to 1.176 million b/d in 2013.

platts

Table: Production of oil and other liquids by leading western companies

[ohanian]

We should call it "Peak Oil Output" or POO

Don't wait till the POO hits the fan. Sell the shares of the oil companies this year.

[vtsnowedin]

We should call it "Peak Oil Output" or POO

Don't wait till the POO hits the fan. Sell the shares of the oil companies this year.

Why sell the shares? They will make just as much profit selling oil on the down side of Hubbert's curve as they did on the up side. Perhaps much more.

[Strummer]

They will make just as much profit selling oil on the down side of Hubbert's curve as they did on the up side. Perhaps much more.

That's assuming price can rise indefinitely to keep up with the rising costs. Good luck with that.

[ROCKMAN]

Just a couple of points. It has been decades since Big Oil was a significant player in the US. The only change in that trend has occurred in the Deep Water GOM. But Big Oil has lots of company out there from Little Oil.

And one needs to be careful how they interpret production gains by Big Oil. Often a large percentage of those gains is not new oil/NG but reserves acquired in an acquisition. ExxonMobil loves to brag about how good they are at replacing their production. But several years ago when the acquired XTO that one acquisition accounted for more than 80% of their reserves “increase” that year.

[Ron Patterson]

Why sell the shares? They will make just as much profit selling oil on the down side of Hubbert's curve as they did on the up side. Perhaps much more.

I don't really think so:
http://www.csmonitor.com/Environment/Energy-Voices/2014/0131/Chevron-follows-Shell-Exxon-Mobil-profit-slide.-Is-Big-Oil-in-trouble
Chevron follows Shell, Exxon Mobil profit slide. Is Big Oil in trouble?
As supplies of easily obtainable oil dwindle and prices remain flat, the world's oil majors are getting less in return for the vast sums they invest on big, risky projects that don't always pan out.

[vtsnowedin]

Why sell the shares? They will make just as much profit selling oil on the down side of Hubbert's curve as they did on the up side. Perhaps much more.

I don't really think so:
http://www.csmonitor.com/Environment/Energy-Voices/2014/0131/Chevron-follows-Shell-Exxon-Mobil-profit-slide.-Is-Big-Oil-in-trouble
Chevron follows Shell, Exxon Mobil profit slide. Is Big Oil in trouble?
As supplies of easily obtainable oil dwindle and prices remain flat, the world's oil majors are getting less in return for the vast sums they invest on big, risky projects that don't always pan out.

I wouldn't worry about a quarter or two where they make adjustments to actual field results. They have the cash and other assets to place lots of bets and cash out the losers then buy winners from small companies that don't have the resources to fully extract a field once found.
The end of that article has a quote that reveals the bias of the author.

“The financial risks of staying invested in fossil fuels are high because two-thirds of proven fossil fuel reserves simply cannot be burned, yet the markets treat this basic physics like it is science fiction,” Tom Van Dyck, financial adviser at RBC US Wealth Management, said in a statement.

“Either coal, oil and gas deposits become stranded assets, or we do,” said Mr. Van Dyck, who advised several of the signatories to the initiative.

They are licking their chops at the prospect of shutting in the remaining fossil fuels and jump on any evidence that points their way.
When they devise a way to shut in the remaining fossil fuels without starving six billion people to death or otherwise exterminating them I will give there plans more credence.

[ROCKMAN]

The thing to remember about Big Oil stocks: most buy them in anticipation of prices going up. Even the folks looking for safe dividend returns still worry about losing share value which is why the invest in "blue chip" stocks. Bu Wall Street typical values all public oils on their ability to increase their proven reserve base and not on the "profits" per se. Which is why Big Oil is always looking for a big acquisition because it's nearly impossible to replace their declining reserve base with the drill bit alone.

[rollin]

US crude oil production keeps rising, up 10 percent January through November last year. That's 7.768 million bbls/day. So as Rockman says, the big players are not as significant anymore.

The gain in world crude oil production since 2005 about matches the gain in the US crude production since 2007. Essentially the ROW is running flat.
So unless a number of other countries start drilling shale or magically get big new finds, this is it people. We are at or near the top of the production cycle for crude, with some value added by tar sands and NGL.

Did you hear that the Tesla finished it's cross country run with an equivalent mpg of about 100 despite the major snowstorms it went through?

[ROCKMAN]

pstarr - I figure if you afford a Tesla you can easily afford the overhead of such a qualified "pit" crew. I also assume TPTB behind Tesla took the company jet to the finish line for the big photo op. Probably did get quit as good mileage as the car.