Publicly-traded oil companies in the United States reduced their estimates of available reserves in 2016 for the second year in a row, partly as a result of “debooking” previously-proven reserves in the Canadian tar sands/oil sands, the U.S. Energy Information Administration reports.
The 67 public companies account for about 25% of global production, the EIA notes. They’re required to report their proven reserves to the U.S. Securities and Exchange Commission each year.
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This year’s reports could be taken as evidence the companies are tapping out their operations while they can, but hedging their bets on a long-term future for the tar sands/oil sands. “The decline in proved reserves was heavily concentrated in a few companies that reduced their estimated reserves from Canadian oil sands projects,” EIA notes. “Downward revision of existing resources, relatively low extensions and discoveries, and relatively high production also contributed to a decline in proved reserves.”
EIA defines an “extension” as the discovery of additional production capacity at an existing oilfield.
“Additions from extensions and discoveries and net purchases of reserves from companies not included in this analysis were offset by large negative revisions to company assessments of existing reserves,” the statistical agency reports. “Reserves also declined as these companies collectively extracted 8.7 billion barrels of liquids in 2016. The combined effect of these changes and other factors was a net reduction of 5.4 billion barrels in proved reserves.”
For the first part of 2017, “capital expenditures remain lower than for the same period in 2016. Generally, larger companies with more production are reducing expenditures, while relatively smaller companies are increasing their capital expenditures.”