Big Oil To See Production Peak In 2028

The pandemic shock to demand and the energy transition strategies are set to bring peak crude and natural gas production for Big Oil in 2028, at a lower volume and earlier than previously expected, Rystad Energy said in an analysis this week.

The five integrated supermajors – ExxonMobil, Chevron, BP, Shell, and Total – will see their combined crude oil and natural gas production peak at 18 million barrels of oil equivalent per day (boepd) in 2028, compared to projections from before COVID-19 that had expected the combined production to continue rising until 2030 at over 20 million bpd.

Last year, Big Oil’s combined oil and gas production declined by close to 5 percent, or by 900,000 boepd, compared to 2019, according to Rystad Energy. In 2020, the five supermajors also incurred a record combined $76 billion loss due to the crash in oil prices and oil demand, the analysts said.

Over the past year, emission reduction targets and strategies have altered the long-term outlook for the supermajors’ production.

Rystad Energy now sees the majors’ net production at around 17.5 million boepd in 2025 and peaking at around 18 million boepd in 2028. Just before the pandemic, Rystad Energy had expected 2025 production to be at 19 million boepd and 20 million boepd in 2028.

Some of the European supermajors that have committed to becoming net-zero emission businesses by 2050 have already said that their oil production would gradually drop over the years.

BP, for example, said it would boost its investment in low-carbon energy ten times to US$5 billion a year and reduce oil and gas production by 40 percent by 2030. Earlier this month, Shell said its oil production peaked in 2019 and is set for a continual decline over the next three decades.

“The key to success for the five majors over the next decade will be to strengthen their business in more resilient regions, restructure and resize to match the market needs, and pay back their high debt levels,” said Rahul Choudhary, upstream analyst at Rystad Energy.

By Tsvetana Paraskova for Oilprice.com