Oppenheimer analysts Fadel Gheit and Robert Du Boff examine oil and gas reserves held by the oil majors as well as the large E&P companies as of end-2013 in their April 8, 2014 research note.
“The combined estimated proved reserve of the largest four companies at the end of 2013 was a record 67.8 bboe, up 2% year-on-year, 1% in the last three years and 6% in the last five years,” reports Oppenheimer.
From the table above, note that Exxon Mobil Corporation (NYSE:XOM) and BP plc (NYSE:BP) (LON:BP) hold the largest proved reserves amongst the four majors with 25.22 bboe and 17.73 bboe respectively.
Oil Majors’ reserve replacement rate
Reserve replacement rate, a crucial metric that shows the extent of replacement of depleted oil reserves, was on average 119% over the last three years and 115% over the last five years for the integrated majors. Here too, Exxon Mobil Corporation (NYSE:XOM) and BP plc (NYSE:BP) (LON:BP) led from the front, reporting 115%/150% (average 3 years/5 years) and 132%/105% (average 3 years/5 years) respectively.
Cost of reserve replacement
In 2013, the integrated majors spent $133.24 billion on reserve replacement of which Shell Royal Dutch Shell plc (NYSE:RDS.A) (NYSE:RDS.B) accounted the maximum of $39.18 billion, followed by Exxon Mobil Corporation (NYSE:XOM) at $35.96 billion, Chevron Corporation (NYSE:CVX) at $33.51 billion and BP plc (NYSE:BP) (LON:BP) at $24.57 billion.
“The four largest integrated oil and gas companies spent more than $360 billion on reserve replacement in the last three-year period and more than $577 billion in the last five-year period. Shell led its peers in reserve replacement spending in the last three-year period, slightly edging XOM, while BP spent the least (in part reflecting the TNK-BP asset swap), followed by Chevron. XOM, however, led the group in reserve spending in the last five-year period, followed by Royal Dutch Shell plc (NYSE:RDS.A) (NYSE:RDS.B), Chevron Corporation (NYSE:CVX) and BP,” observes the note.
Spending on reserve replacement by the integrated oil majors grew 22% on an aggregate basis of the past three years and 57% over the past five years.
Finding and development (F&D) costs
F&D costs averaged $21.12/boe for the four majors during the past three years and $17.59/boe in the five-year period.
BP plc (NYSE:BP) (LON:BP) was the lowest-cost major across both the three-year and five-year timeframe.
The four majors together produced over 15 bboe in the latest three years and over 25 bboe over the last five years. Exxon Mobil Corporation (NYSE:XOM) was the production leader amongst the majors in both timeframes.