Shell said its reserves replacement ratio -- the proportion of oil and gas production during the year that was offset by the addition of new resources -- was minus 20 percent. The company not only failed to replace any of the 1.1 billion barrels equivalent it pumped in 2015, but also wrote off another 200 million barrels to account for the plunge in oil prices.
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BP Plc reported Feb. 2 a reserve replacement ratio of 61 percent for 2015, while Chevron Corp. achieved 107 percent.
And Exxon's reserve-replacement ratio fell to 67 percent in 2015, for the first time in 22 years. I still have some reading to do on how proved & probable reserves are actually estimated. Difficult research for amateurs, I guess (unless someone can point me in the right direction?). Even more difficult to say how much of the replacement gaps is due to falling prices (reserves becoming uneconomical) and how much is due to simply being unable to find or buy enough new reserves. And even more difficult (but probably less important) is guessing how accurate these reserve statements actually are. I remember that in 2004 the news was that Shell had overstated their reserves for years by 20%.
Anyway, I'm asking because a while ago I saw a presentation video by Steven Kopits (a presentation at Columbia Uni. IIRC, 2013 or 2014) where he stated that E&P costs in the industry had increased by about a whooping 500% in the last decade, a trend likely to continue, and that he wondered whether the big private players would still exist ten years from now, at least in their present form as industry giants. Back then I thought that to be a shocking statement.
But was it? If low prices are here to stay, could the Big Five really go the way of the dinosaurs so soon? Or could they survive much better due to being vertically integrated, so if the upstream business is tanking, they could hang on to refining and retailing? And are the Rockefellers really shedding their oil stocks to save the planet, or are they the canary in the coal mine?