Page 6 - NorthAmOil Week 08 2021

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ExxonMobil unveils major

downward reserves revision

GLOBAL SUPER-MAJOR ExxonMobil has revised its a recovery in the SEC [Securities and Exchange
global oil reserves downwards, to levels never Commission] price basis, cost reductions, oper-
seen before in the company’s recent history. The ating efficiencies and increases in planned capital
revision, notably, included wiping nearly all of its spending,” ExxonMobil said in the filing.
Canadian oil sands reserves from its books. The company’s reserves are now at their low-
According to a regulatory filing this week, the est since the merger between Exxon and Mobil in
super-major’s total reserves for all products fell 1999, which the super-major attributed to “very
to 15.2bn barrels of oil equivalent at the end of low prices during 2020 and the effects of reduc-
2020 from 22.4bn boe the previous year. This was tions in capital expenditures”. Indeed, the latest
mostly driven by the oil sands, though US shale revision is steeper than the one made during the
ExxonMobil’s oil sands gas properties also played a significant part. 2014-16 oil industry downturn, when Exxon-
reserves dropped by The revisions are dependent in part on oil Mobil had a 4.8bn boe cut to its reserves.
98%. prices, however, and the higher cost of oil sands The company cut the value of its shale gas
developments means they are more vulnerable assets – which it had previously been talking up
to removal from a company’s books when crude as a growing priority – by over $20bn last year.
prices fall, as they did last year. ExxonMobil’s oil The downward reserves revision comes just
sands reserves dropped by 98%, according to the weeks after ExxonMobil also posted its first
filing, but can be brought back as crude prices annual loss in at least 40 years. The super-ma-
rise. jor had previously warned that low prices could
“Among the factors that could result in por- wipe up to one-fifth of its oil and gas reserves
tions of these amounts being recognised again from its books, but this revision equates to
as proven reserves at some point in the future are around a third.™

Cheniere sees loss shrink

on recovering LNG demand

US GULF COAST LEADING US LNG producer Cheniere Energy colder-than-expected weather and certain sup-
has posted a net loss of $194mn for the fourth ply and transport bottlenecks.
quarter of 2020. While this was a decrease on Cheniere said it exported 130 cargoes of LNG
a net profit of $939mn in the fourth quarter of in the fourth quarter of 2020 – unchanged from
2019, it marked an improvement on a loss of the fourth quarter of 2019. Over the whole of
$463mn in the third quarter of 2020. 2020, however, the company’s exports totalled
The result illustrates how demand for LNG 391 cargoes, down from 429 in the prior year.
is recovering after a downturn last year that was Exports notably fell over the summer of 2020, as
largely caused by the first wave of the coronavi- a number of buyers cancelled cargoes scheduled
rus (COVID-19) pandemic and the lockdowns for loading from US terminals. Cheniere, as the
that were brought in globally in an effort to slow largest US exporter of LNG, was hit the hardest
the spread of the virus. by these cancellations.
The company also expressed confidence However, the company said that last week’s
over the trajectory of the recovery, saying it was winter storm had “no material impact” on its
raising its forecast for adjusted earnings before assets or operations. Cheniere kept both its
interest, tax, depreciation and amortisation export terminals operating throughout the
(EBITDA) to $4.1-4.4bn, up from a previous period, unlike the two other exporters on the
projection of $3.9-4.2bn. Gulf Coast, though its feed gas volumes report-
“A slow return towards normal is expected to edly fell to around 25% of what they were
occur in the coming months, depending on the previously.
speed of vaccine rollout within regions, and the Separately from its quarterly results, Cheniere
speed and shape of economic recovery across announced that it would start providing its LNG
the LNG-importing nations,” Cheniere said. Its customers with greenhouse gas (GHG) emis-
comments came after demand already improved sions data associated with each LNG cargo pro-
in Asia this winter, thanks to a combination of duced at its terminals from 2022.™

P6 www. NEWSBASE .com Week 08 25•February•2021