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Source: pan demin, Shutterstock
World’s largest publicly traded oil and gas exploration giant ExxonMobil Corp (NYSE: XOM, XOM:US) has erased oil-sands crude from its revised books, as per a company filling on Wednesday.
The Texas-based multinational oil exploration company recorded 15.2 billion barrels of oil reserves by the end of 2020, a sharp decline from 22.44 billion a year ago.
In addition to it, Exxon recorded a drop of 98 per cent of its heavy crude reserves from the Western Canada’s sandy bogs.
This revision implies that Exxon will not be able to further drill in this area till such time there is a significant rise in oil prices in the near foreseeable future or a drop in drilling costs due to technological advancement.
As per company sources, the pandemic and the subsequent crude price crash was the driving cause for the decline in reserves.
Drilling oil sands is one of the most cost intensive operations for energy firms. The price crash is seen as a trigger for its removal from the books.
Exxon though has hinted that there are chances of these erased figures to feature again in the books on conditions of recovery in the U.S. SEC (Securities and Exchange Commission) price basis, reduction in costs, improvement in operating efficiencies and increase in planned capital spending.
Image @Pixabay
Exxon Mobil also reported annual loss for the first time in last four decades. This decline also reflected in its falling scrip price.
Exxon has also agreed to sell off one of its upstream assets in the U.K. central and North Sea to NEO Energy, which it deemed non-operational. The deal price was fixed at more than US$1 billion.
The producer also had to cut 1.5 billion barrels from its US shale reserves on account of substantial reduction in the capital expenditure.
