Last Year, Energy Companies Registered Approximately 8 Billion Barrels Of Canadian Oil sands Reserves
According to the financial post, “a group of U.S. listed oil companies wrote down their proved reserves in the Canadian oil sands by nearly eight billion barrels in 2016, as energy firms continue to defer investments in major heavy oil projects”.
A study released on Monday noted that the U.S. Energy Information Administration, a data-gathering agency, tracked 68 oil companies listed on the U.S stock exchanges and found that their total proved reserves declined for the second consecutive year.
Canada has the largest portion of minimizing reserves over the year followed by Latin America which became the second largest after the debooking of Canadian assets.
“Companies are forced to revisit the economic viability of their most expensive barrels due to reserves coming to a low point. Big international companies have in recent year shifted capital investment away from Canada’s oil sands in favor of shorter-cycle returns, particularly in U.S shale basins”. Noted the financial post.
Exxon-Mobil Corp. recently reported a massive 3.5- billion development, operated by Calgary-based subsidiary Imperial Oil Ltd.
ConocoPhillips Co. cut its oil sands reserves in half in 2016, down to 1.2 billion barrels, following a tumble in oil prices. In mid-July CNOOC Ltd., China’s largest offshore oil producer, warned that it would post a more than $1- billion loss after taking charges on its oil sands assets.
According to the EIA, the EIA’s study included several Calgary-based oil sands companies with secondary Listings on U.S. stock exchanges, including Cenovus Energy Inc. and Sunor Energy Inc. The Canadian companies accounted for only a small portion of proved reserve declines.
Following major write downs in the oil sands, some industry analyst observed that the reserve reductions are largely due to the accounting practices of U.S.-listed companies that report to the U.S Securities and Exchange Commission, which looks at commodity prices in hindsight rather than based on future projections.