Exxon Mobil Corporation has announced proved reserves were 20 billion oil-equivalent barrels at year-end 2016, inclusive of a net reduction of 3.3 billion oil-equivalent barrels from 2015. Reserves changes in 2016 reflect new developments as well as revisions and extensions to existing fields resulting from drilling, studies, analysis of reservoir performance and application of the methodology prescribed by the US Securities and Exchange Commission.
As a result of very low prices during 2016, certain quantities of liquids and natural gas no longer qualified as proved reserves under SEC guidelines.
These amounts included the entire 3.5 billion barrels of bitumen at Kearl in Alberta, Canada. Another 800 million oil-equivalent barrels in North America did not qualify as proved reserves, mainly due to the acceleration of the projected economic end-of-field life. These revisions are not expected to affect the operation of the underlying projects or to alter the company’s outlook for future production volumes.
The reductions were partially offset by reserves additions of oil and natural gas totalling approximately 1 billion barrels of oil equivalent in the US, Kazakhstan, Papua New Guinea, Indonesia and Norway, which replaced 65% of production and were the result of acquisitions, improved asset performance and a decision to fund an expansion of the Tengiz project in Kazakhstan.
Consistent with US SEC requirements, ExxonMobil reports reserves based on the average of the applicable market price prevailing on the first day of each calendar month during the year. Prices to date in 2017 have been higher than the average first-of-month prices in 2016. Among the factors that would result in these amounts being recognised again as proved reserves at some point in the future are a recovery in average price levels, a further decline in costs, and/or operating efficiencies.
The annual reporting of proved reserves is the product of the corporation’s long-standing, rigorous process that ensures consistency and management accountability in all reserves bookings. Over the past 10 years, ExxonMobil has added proved oil and gas reserves totalling approximately 13 billion oil-equivalent barrels, including the impact of asset sales, replacing 82% of produced volumes. ExxonMobil’s reserves life at current production rates is 13 years. Liquids account for 53% of proved reserves.
During 2016, ExxonMobil added nearly 2.5 billion oil-equivalent barrels to its resource base through by-the-bit exploration discoveries, undeveloped resource additions and strategic acquisitions. The resource base includes proved reserves, plus other discovered resources that are expected to be ultimately recovered.
ExxonMobil’s by-the-bit exploration success in 2016 included significant oil discoveries in Nigeria and Guyana. Strategic unconventional resource additions were made in the Appalachian Basin in Pennsylvania, the Permian Basin in West Texas and Neuquén Province in Argentina.
Overall, the corporation’s resource base totalled more than 91 billion oil-equivalent barrels at year-end 2016, taking into account field revisions, production and asset sales.