Decline in production?

Four of the major international oil companies are facing a decline in global production of crude, despite unprecedented profits. Can they reverse the trend?

The American oil company ExxonMobil, first
company in the world according to Forbes magazine, has since 2007 a sharp decline in its production, after more than a century of uninterrupted expansion.

In 2011, the ExxonMobil oil extractions reached 2,312 million barrels per day (Mb/d), falling 4.5% compared with 2010 and 11.6% compared to 2007, according to the data available in the latest annual report of the group.

Very poor result for the n ° 1 of the majors, while the gross consumption increased in the meantime and the barrel price continue since 2007 to levels never seen before until then.

Yet the number of drilling undertaken by ExxonMobil around the world increased very strongly, from 971 new wells in 2007 to 1 249 in 2010, and then 1 606 in 2011, representing an increase of 65% over four years. Same trend with respect to annual net production costs: Exxon rose from 78.6 billion dollars in 2007 to 152.5 billion in 2010, and then to 166.7 billion in 2011 (+ 112% in four years!).

97% of new wells drilled by Exxon were known and already exploited fields.

The year 2007 will be the year of peak oil for the eldest daughter of Standard Oil, founded in 1870 by John D. Rockefeller? The answer will come. In the meantime, Exxon has confirmed the continuation of the drop in production in its latest quarterly report, released in November. maintain the production becomes "a recurring challenge", reports Reuters news agency.

Decreases of the extractions of Exxon in particular affect Africa (notably Nigeria and Angola) and the North Sea. The Middle East, the Russia and Caspian region are spared.

The American continent, the rear base of the firm, shows in 2011 on resumption of the production of crude oil and its surrogates. This recovery, generously welcomed US and discount press ahead on this blog, is not enough to time to bring Exxon retrievals on the whole of the American continent to the level achieved in 2007, or stop (far from it) the fall of its global production.

The fall in production of Exxon turns into collapse if we consider the production of conventional crude — conventional liquid oil, which is almost two-thirds of the offer of the American giant: reached 1.338 Mb/d in 2011, after 1,496 Mb / in 2010 (-10,5 %) to 1.875 Mb/d in 2007 (27.5%!)

Exxon eat black bread: "what else?" Its main development prospects lie in Iraq (where Exxon is more than ever in delicacy with the Baghdad Government, and takes the risk of being shut down access to more massive projects), in the Russian Arctic (where the interference by the yankee tanker could remain a vain Tower of strength, according to the latest forecasts pessimistic ― published by the International Energy Agency) and finally in North America where uncertainties remain... many.

Royal Dutch Shell, no. 2 among the large international oil companies, looks a bit better than Exxon.

Nevertheless, its extraction of crude oil and liquid natural gas recorded a decrease of 9.5% between 2010 and 2011, to 1.536 Mb/d, according to the latest annual report. Trending erratic in the best of cases, since the previous year, the production of Shell had instead increased to a similar extent. (Alas, Shell provides no separate data for crude oil on the one hand and natural gas liquid on the other hand, although the functions of these two products are far from being interchangeable, especially for the manufacture of fuel).

Shell boss, Peter Voser, acknowledged last year that given the current pace of decline of the existing world, the oil industry should be able to develop over the next decade "the equivalent of four Saudi Arabia or ten northern seas (...)  as a whole just to keep offers at its current level"...

Symbolic? Shell saw last week one of its offshore platforms running aground in Alaska following a storm. The website of Forbes magazine refers to a pure and simple "fiasco" of Royal Dutch Shell in the Arctic. The Financial Times noted yesterday how it will be difficult to develop resources in the far North offshore, ultimate vast largely unexplored region on Earth.

BP also had to stop its efforts to drill off the coast of Alaska in 2012.

The ex-British Petroleum saw also his overall production of crude decline very strongly. In 2011, it has reached 2,157 Mb/d, down 9.1% compared to 2010, and 15% from 2009, according to the latest annual report.

BP production is declining just about anywhere, including in the North Sea, Africa, and America. Far from enough to offset these many declines, the British back in Iraq in 2011 of the national steward again confirms the key position now occupied by Baghdad on the Board of the black gold.

Nowhere else in Azerbaijan, former Soviet Republic located between the Caucasus and the Caspian Sea, the difficulties of BP appear more glaring. Very sound way, the local potentate, Ilham Aliyev expressed in October his anger:

"It is absolutely unacceptable (...) Investors who are not able to hold their obligations and to respect the contracts must learn the lesson. Harsh measures should be taken, and will be taken."

After reaching a record production in 2010, the large set of known as offshore oil fields Azeri-Chirag-Guneshli, launched in 1997 by BP, currently crosses a sacred hole of air, with a fall of 12.7% in 2011 alone. A fall that continued through the year 2012, is the specialized agency Platts.

The total extraction of the Azerbaijan declined by 11.4% between 2010 and 2011.

The azeri production is referred to as 'mature', hear that most of the older oil fields in the country are now almost exhausted, and provide almost more gross. Azerbaijan (in particular its capital, Baku) was one of the two cradles of the oil industry at the end of the 19th century with the U.S. State of Pennsylvania.

Hope crucial to maintain fetches this ancient oil countries and very generous so far, the offshore Azeri-Chirag-Guneshli complex has a very complex geology, precisely. BP needs to drill new wells to stop the bleeding, as it is committed. To do this, she however seems to lack of drilling platforms, or unwilling to invest with a high risk of ending up with new 'dry' wells, suggests the Agency Platts.

Decline of conventional oil, in particular in the oldest producing countries outside OPEC, uncertain capacity of unconventional oils and the offshore production to compensate for this decline: all familiar symptoms already encountered often in the folder of peak oil.

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