In the second quarter of this year, the top non-OPEC oil companies turned out fantastic revenue: XOM made $10.7 billion and Shell made $8 billion, while Brent crude was pushing $120 a barrel.
But their production declined.
According to Paul Sankey of Deutsche Bank, “Dramatic oil production declines in the second quarter at more than 20 major oil companies, from ExxonMobil (XOM) to Lukoil, were startling, even accounting for lost Libya production of 1.3 million barrels.”
He goes on to reason that oil estimates will have to come down and oil prices could rise to $120 per barrel for the U.S. benchmark contract (WTI):
The sudden loss of a major oil producing nation is not a special item, but rather a recurring theme in global oil... in fact Canadians Suncor Energy (SU) and CNQ — declined. Growth hope Brazil’s Petrobras (PBR) — declined. Two of the three biggest Russian oil producers — declined.
Guess what happened in non-quoted Pemex's production in Mexico? Yep, it declined (just 0.6% in fact, but down)...
Fifteen of the top 20 oil companies showed a decline of 11% to 26% in oil production in the second quarter.
I remind you, dear Energy Capitalist, this was during a period when the price of oil spiked.
Are the majors running out of oil?
Are the majors running out of oil?
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group