Proved oil and natural gas reserves of public companies listed on the US Securities and Exchange Commission (SEC) fell by 5.6 billion barrels of oil equivalent (Bboe) in 2022, after Russia invaded Ukraine, according to the US Energy Information Administration (EIA). report
In its latest weekly oil report released Thursday, the EIA analyzed the published financial reports of 187 domestic and international exploration and production (E&P) companies provided to the SEC. The agency estimates that the companies in the analysis accounted for about half of total non-OPEC oil liquids production in 2022.
The top 20 companies accounted for 68 percent of the 231 Bboe of proven oil and natural gas reserves they held at the end of 2022. Many of these large companies have global operations, and some are national state-owned oil companies with reserves and operations concentrated in their home countries, such as Mexico, China and Brazil.
Divestments from Russia by major oil majors such as BP PLC and TotalEnergies SE led to a decline in proven reserves for the companies, although proven reserve additions were close to the 10-year average in period 2012-2021, according to the report.
Proved reserves of companies in the analysis declined in 2022 due to larger-than-usual sales caused by Western companies exiting Russia, with sales of proved reserves of 12 Bboe in 2022 more than double the 10-year average of 4.6 Bboe, the EIA. said
The addition of organic proved reserves, which the study defines as those from improved recovery and expansions and discoveries, of 16.2 Bboe and purchases of 8.2 Bboe were not enough to cover the increase of sales and normal production by 2022, according to the report.
According to the report, these results suggest that the proven reserves of these companies would have increased in 2022 if it were not for Western companies opting to divest from Russian assets. Positive revisions reflect rising crude oil and natural gas prices in 2022.
According to the report, total exploration and development (E&D) costs incurred by companies increased 10 percent in 2022 from 2021, and remained 22 percent below the average of the previous five years the pandemic (2015-2019).
Meanwhile, in its related annual financial review for 2022, the EIA said companies’ combined petroleum liquids production declined less than one percent and natural gas production grew four percent in 2022 interannually
On the financial front, the companies reduced net debt by $117 billion by 2022. They increased net stock buybacks by $95 billion and cash from operations to $810 billion by 2022, the most of any year in the period 2013-22.
In the study, there were 66 companies based in the US and 66 in Canada. Most of the world’s proven reserves of oil and natural gas were held by US companies. About 64 percent, or 120 of the companies, produced less than 50,000 barrels per day in 2022.
“Our findings are not representative of the entire global E&P sector because we do not include private companies that do not publish financial reports,” the EIA noted.
Earlier this month, the EIA noted in its latest short-term energy outlook that it expects U.S. crude output to set annual records in 2023 and 2024, but added that growth is slowing.
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