Exxon write down reserves due to large concentration in the oilsands

[avb3]

Exxon, from pressure due to a probe by SEC, are writing down their reserves by 19% of their worldwide number due to the large concentration of their reserves in the oil sands, the cost of recovery, and the low price of oil. In fact, Exxon thinks almost half their nominal reserve will have to be left in the ground.

http://www.nytimes.com/2016/10/29/bu...ound.html?_r=0

Exxon Mobil’s oil sand reserves in Canada’s Alberta province are a prime target for a write-down because they are particularly expensive to mine. Investments in oil sands have been slowing, and several oil companies have given up on the resource. Turning oil sands into a usable form of petroleum requires heavy processing and refining.

Because Exxon Mobil’s earnings on oil and gas exploration and production have been in decline, said Brian Youngberg, a senior energy analyst at Edward Jones, “it is increasingly hard for it to demonstrate its reserves as economical in today’s world of more moderate oil prices.”

“Scrutiny will continue to rise on this issue,’’ Mr. Youngberg said, “especially when it updates its reserves in early 2017.”

With the world’s oil industry producing over a million barrels a day more than global demand, few analysts expect oil prices to rise much through the end of the year — even though the expectation that the OPEC cartel may freeze or cut production in the coming months has moderately stabilized prices in recent months.

Other reports on the same issue:

http://www.bloomberg.com/news/articl...-extends-slump

https://www.ft.com/content/53f66878-...4-8b8e77dd083a

http://www.cnbc.com/2016/10/28/exxon...-reserves.html

[rugatika]

Originally Posted by avb3

Exxon, from pressure due to a probe by SEC, are writing down their reserves by 19% of their worldwide number due to the large concentration of their reserves in the oil sands, the cost of recovery, and the low price of oil. In fact, Exxon thinks almost half their nominal reserve will have to be left in the ground.

http://www.nytimes.com/2016/10/29/bu...ound.html?_r=0

Exxon Mobil’s oil sand reserves in Canada’s Alberta province are a prime target for a write-down because they are particularly expensive to mine. Investments in oil sands have been slowing, and several oil companies have given up on the resource. Turning oil sands into a usable form of petroleum requires heavy processing and refining.

Because Exxon Mobil’s earnings on oil and gas exploration and production have been in decline, said Brian Youngberg, a senior energy analyst at Edward Jones, “it is increasingly hard for it to demonstrate its reserves as economical in today’s world of more moderate oil prices.”

“Scrutiny will continue to rise on this issue,’’ Mr. Youngberg said, “especially when it updates its reserves in early 2017.”

With the world’s oil industry producing over a million barrels a day more than global demand, few analysts expect oil prices to rise much through the end of the year — even though the expectation that the OPEC cartel may freeze or cut production in the coming months has moderately stabilized prices in recent months.

Other reports on the same issue:

http://www.bloomberg.com/news/articl...-extends-slump

https://www.ft.com/content/53f66878-...4-8b8e77dd083a

http://www.cnbc.com/2016/10/28/exxon...-reserves.html

You say they ARE writing down their reserves. The articles say they are being asked to consider whether they should write them down. At any rate, the reserves are still there and will get retrieved at some point, when prices rationalize. Or new extraction technologies may come around, extraction costs can be managed better to make it more profitable to retrieve those reserves etc.


Sorry to dash your hopes. Looks like the planet is going to melt into a ball of gooey wax in 20 years.




Exxon Mobil Corp. warned it may be facing the biggest reserves revision in its history as production sank to a seven-year low and profit slid amid a prolonged slump in energy markets.

About 3.6 billion barrels of reserves in the Canadian oil sands and the equivalent of another 1 billion barrels of oil in other North American fields may be in jeopardy if the average energy prices seen during the first nine months of 2016 persist, Exxon said in a statement on Friday. That would equate to 19 percent of Exxon’s reserves and would be the largest de-booking since the 1999 merger that created the company in its modern form.

Exxon’s accounting has prompted a U.S. Securities and Exchange Commission investigation into whether the company should have written down assets as a result of the oil slump, a person with knowledge of the matter said last month. The company didn’t say on Friday whether removing reserves from the books would result in asset-impairment charges that could hurt its financial results.

“The fact that everyone else has recorded charges and they have not created a red flag,” said Brian Youngberg, an analyst at Edward Jones & Co. in St. Louis. “In the big picture, it doesn’t mean those reserves won’t eventually get produced.”


When we run out of oil in 2011 prices will go back up. Just like 97% of the scientists and Jimmy Carter predicted.

[elkhunter11]

Having worked in the oilsands under Exxon management for over eight years, I can understand why they would consider a significant portion of the oil in the oilsands to not be worth recovering. The owners of Syncrude paid Exxon a large amount of money to run the Syncrude plant and to show them how to recover more oil at a lower cost, but Exxon failed miserably. The Exxon management chose to ignore everything that the previous management had learned over the previous years, and they insisted on running the plant like any other Exxon refinery in other parts of the world. As a result they let the plant freeze up to the point that all production halted for a considerable time, and it took a great deal of extra expense to get the plant online again. Losses totaled several hundred million dollars for that incident alone. For the entire period that Exxon was in charge, their arrogant attitude resulted in failure after failure, and they never did learn how to run the plant efficiently. I have no doubt that their failures at Syncrude are a huge factor in them reducing their estimates on the amount of oil that can be extracted from the oilsands at a profit.

[Mangosteen]

Originally Posted by avb3

Exxon, from pressure due to a probe by SEC, are writing down their reserves by 19% of their worldwide number due to the large concentration of their reserves in the oil sands, the cost of recovery, and the low price of oil. In fact, Exxon thinks almost half their nominal reserve will have to be left in the ground.

http://www.nytimes.com/2016/10/29/bu...ound.html?_r=0

Exxon Mobil’s oil sand reserves in Canada’s Alberta province are a prime target for a write-down because they are particularly expensive to mine. Investments in oil sands have been slowing, and several oil companies have given up on the resource. Turning oil sands into a usable form of petroleum requires heavy processing and refining.

Because Exxon Mobil’s earnings on oil and gas exploration and production have been in decline, said Brian Youngberg, a senior energy analyst at Edward Jones, “it is increasingly hard for it to demonstrate its reserves as economical in today’s world of more moderate oil prices.”

“Scrutiny will continue to rise on this issue,’’ Mr. Youngberg said, “especially when it updates its reserves in early 2017.”

With the world’s oil industry producing over a million barrels a day more than global demand, few analysts expect oil prices to rise much through the end of the year — even though the expectation that the OPEC cartel may freeze or cut production in the coming months has moderately stabilized prices in recent months.

Other reports on the same issue:

http://www.bloomberg.com/news/articl...-extends-slump

https://www.ft.com/content/53f66878-...4-8b8e77dd083a

http://www.cnbc.com/2016/10/28/exxon...-reserves.html

EXACTLY what the Saudis wanted by design. Leave Canada tar sand and marginal heavy oil in the ground. They have succeeded. OPEC wins this time.
Too bad Obama started it all with Iran. Either way with the USA non conventional success it would have come anyways.

[Mangosteen]

Originally Posted by elkhunter11

Having worked in the oilsands under Exxon management for over eight years, I can understand why they would consider a significant portion of the oil in the oilsands to not be worth recovering. The owners of Syncrude paid Exxon a large amount of money to run the Syncrude plant and to show them how to recover more oil at a lower cost, but Exxon failed miserably. The Exxon management chose to ignore everything that the previous management had learned over the previous years, and they insisted on running the plant like any other Exxon refinery in other parts of the world. As a result they let the plant freeze up to the point that all production halted for a considerable time, and it took a great deal of extra expense to get the plant online again. Losses totaled several hundred million dollars for that incident alone. For the entire period that Exxon was in charge, their arrogant attitude resulted in failure after failure, and they never did learn how to run the plant efficiently. I have no doubt that their failures at Syncrude are a huge factor in them reducing their estimates on the amount of oil that can be extracted from the oilsands at a profit.

Wow. Just WOW!!! You would have thought Exxon would have had a " lessons learned " database. Looks like someone's EGO was in the way. Just plain dumb.

[Big Grey Wolf]

I totally agree with the American Exxon arrogance. I worked for both Syncrude and Suncor. Many hard working engineers, operators and maintenance employees worked very hard for almost 50 years developing the oilsands expertise to produce quality synthetic crude. Exxon engineers would come from Houston, overcharge for their time for substandard knowledge then beat a path back to Texas when they failed.

[Sundancefisher]

Originally Posted by Mangosteen

EXACTLY what the Saudis wanted by design. Leave Canada tar sand and marginal heavy oil in the ground. They have succeeded. OPEC wins this time.
Too bad Obama started it all with Iran. Either way with the USA non conventional success it would have come anyways.

Probably you don't know but calling our oil sands tar sands is an insult to Albertans. The tar name is derived from the anti Alberta Eco fanatics.

People.

Reserve write downs are a common part of the oil and gas industry.

It has nothing to do with leaving anything in the ground.

If written down you are saying with current commodity prices they don't envision developing anytime soon.

When prices rebound they get added back in.

Avb has yet again posted a story with a global warming agenda. Evil oil. Oil industry failing. Green power so yummy.

Lol

[elkhunter11]

Originally Posted by Mangosteen

Wow. Just WOW!!! You would have thought Exxon would have had a " lessons learned " database. Looks like someone's EGO was in the way. Just plain dumb.

Exxon has a standard way of doing things, they do not adapt their methods to suit the individual application.It doesn't matter whether the location is Northern Alberta, or the Southern USA, or Saudi Arabia, the same procedures and methods must be followed. I was in a meeting with the CEO shortly after Exxon took over, and when it was pointed out that things don't work the same at -40 in Northern Alberta, as they do in +30 in Saudi Arabia, the CEO responded that the plant was designed for -40, so the cold would not be a factor. It was shortly after that, after Exxon refused to allow us to spend several hundred thousand dollars to install extra hoardings and heaters around our critical instruments, as we normally did each winter, that some critical instruments froze up, and the plant crashed. Between lost production, overtime ,replacement parts, scaffolding, hoarding and heating to make repairs, the total cost of that mistake was several hundred million dollars.

Probably you don't know but calling our oil sands tar sands is an insult to Albertans. The tar name is derived from the anti Alberta Eco fanatics.

Actually, when I started work in the oilsands in 1980, before this anti oilsands movement really got going, the people living and working in the area referred to the area as the tarsands. It was years later that people began calling it the oilsands.

You could be correct but when I was working in Ft McMurray in 1978 everyone just called them tar sands. The name stuck with me. It's just tar.

Exactly! If anything, we were more insulted when the politically correct people told us to refer to the area as the oilsands. But like anything else, if you do it long enough, you get used to it. But I do find it amusing that someone would think that it was an insult to Albertans to use the term 'tar sands".

[Mangosteen]

Originally Posted by Sundancefisher

Probably you don't know but calling our oil sands tar sands is an insult to Albertans. The tar name is derived from the anti Alberta Eco fanatics.

People.

Reserve write downs are a common part of the oil and gas industry.

It has nothing to do with leaving anything in the ground.

If written down you are saying with current commodity prices they don't envision developing anytime soon.

When prices rebound they get added back in.

Avb has yet again posted a story with a global warming agenda. Evil oil. Oil industry failing. Green power so yummy.

Lol

You could be correct but when I was working in Ft McMurray in 1978 everyone just called them tar sands. The name stuck with me. It's just tar.

On another note for the write down it means Exxon internal price forecast for the next 25 years must be so low that they were forced by accountants to write it down. Would be good to see a copy of that forecast. I wonder what the provincial price forecast for future royalty cash flow predictions are and how they compare to Exxon.

[elk396]

There's no way oil companies in Fort Mac can pay folks with two years of education $3-$400Grand a year to work at those facilities and compete on the world market. They will be run out of the market. Many spoiled Canadians were turning their noses up $150 grand to work up there. Things may be changing now tho.

[elkhunter11]

Originally Posted by elk396

There's no way oil companies in Fort Mac can pay folks with two years of education $3-$400Grand a year to work at those facilities and compete on the world market. They will be run out of the market. Many spoiled Canadians were turning their noses up $150 grand to work up there. Things may be changing now tho.

The average person working for one of the oil companies isn't making $300 -$400K. You either need to be in a higher management position, or you need to be a specialty contractor, or you need to work pretty much every hour that you are legally allowed to to make that much.

[Bitumen Bullet]

Originally Posted by elk396

Many spoiled Canadians were turning their noses up $150 grand to work up there. Things may be changing now tho.

Many rational Canadians look at buying a $400,000 trailer in a volatile market while working long hours 21 days at a time only to die an early death turn up their nose.

And they may also ask if jobs in Canada are not advancing the interests of Canadian citizens, Canadian workers, why do some people think it reasonable to criticize the workers and not how we are managing our resources and economy?

Canada has more valuable natural resources per capita than almost any other nation, our workers should be the richest in the world. Unless of course a nations resources do not belong to it's citizens.

[Mangosteen]

Originally Posted by Bitumen Bullet

Many rational Canadians look at buying a $400,000 trailer in a volatile market while working long hours 21 days at a time only to die an early death turn up their nose.

And they may also ask if jobs in Canada are not advancing the interests of Canadian citizens, Canadian workers, why do some people think it reasonable to criticize the workers and not how we are managing our resources and economy?

Canada has more valuable natural resources per capita than almost any other nation, our workers should be the richest in the world. Unless of course a nations resources do not belong to it's citizens.

We have been raped. Norway on the other hand looked after the people. Canada not.

[Sundancefisher]

Originally Posted by Mangosteen

You could be correct but when I was working in Ft McMurray in 1978 everyone just called them tar sands. The name stuck with me. It's just tar.

On another note for the write down it means Exxon internal price forecast for the next 25 years must be so low that they were forced by accountants to write it down. Would be good to see a copy of that forecast. I wonder what the provincial price forecast for future royalty cash flow predictions are and how they compare to Exxon.

But oil sands is not tar. If you want tar you need to visit The La Brea Tar Pits.

Tar and oil sands are apples and shingles names.

[catnthehat]

Originally Posted by Sundancefisher

Probably you don't know but calling our oil sands tar sands is an insult to Albertans. The tar name is derived from the anti Alberta Eco fanatics.




Lol

Yo are s very wrong in your assumption about the oniker "Tarsands"
The were clle the tarnad long before the anti got n on te gme.
When I first came up here in the ver earl 70's the first welding rig I saw was owned by a local outfit called Tarsands Machine and Welding , ran and owned by local people ,some of their families had been here before Confederation.
The Tarsand Bettys is a very proud local lady's roller derby club.
Tarsand Charlie was a mascot up here for years.
The list goes on.
It was not until recently that someone ( not us up here) decided that the term " Tarsand" was a derogatory term.
I still call them the Tarsands as do other long time residents.
Cat

[catnthehat]

Originally Posted by Sundancefisher

But oil sands is not tar. If you want tar you need to visit The La Brea Tar Pits.

Tar and oil sands are apples and shingles names.

Have you even been here ?
I can show you bitumen oozing out of the hills in the summer and pools of tar.
ave fixed canoes with the stuff, as did the natives that the first white explorers noticed when they came up here
The tar floating down the Ells river renders fishing impossible at times with big globs of bitumen tar that grabs onto your line an mess up your rod and reel.
Cat

[Sundancefisher]

Originally Posted by Bitumen Bullet

Many rational Canadians look at buying a $400,000 trailer in a volatile market while working long hours 21 days at a time only to die an early death turn up their nose.

And they may also ask if jobs in Canada are not advancing the interests of Canadian citizens, Canadian workers, why do some people think it reasonable to criticize the workers and not how we are managing our resources and economy?

Canada has more valuable natural resources per capita than almost any other nation, our workers should be the richest in the world. Unless of course a nations resources do not belong to it's citizens.

Not a rational post or just confusing.

All Canadians benefited from resource development. It produced corporate and personal taxes that in turn went into the government spending bucket for all the public spending programs voters clamor for. It paid for hospitals reduce taxes for others due to a higher tax capture. It also kept electricity prices low.

When comparing our oil extraction to the world... You need to compare apples to apples.

That means comparing us to onshore US... Factoring they also have lower costs and fewer regulatory hurdles.

[catnthehat]

Originally Posted by Mangosteen

Wow. Just WOW!!! You would have thought Exxon would have had a " lessons learned " database. Looks like someone's EGO was in the way. Just plain dumb.

There is a saying that has been the Mantra of Syncrude and contractor employees since EXXON arrived on the scene with their we are right attitude/
" We won't be happy until you are not happy"
EXXON succeeded quite well at that , no question.
Cat

[Sundancefisher]

Originally Posted by catnthehat

Yo are s very wrong in your assumption about the oniker "Tarsands"
The were clle the tarnad long before the anti got n on te gme.
When I first came up here in the ver earl 70's the first welding rig I saw was owned by a local outfit called Tarsands Machine and Welding , ran and owned by local people ,some of their families had been here before Confederation.
The Tarsand Bettys is a very proud local lady's roller derby club.
Tarsand Charlie was a mascot up here for years.
The list goes on.
It was not until recently that someone ( not us up here) decided that the term " Tarsand" was a derogatory term.
I still call them the Tarsands as do other long time residents.
Cat

Good to know. Outsiders use it in a derogatory way.

http://energyeducation.ca/encyclopedia/Tar_sands

[Don Andersen]

Sundance,

Once again you have demonstrated your profound ignorance. I was born here as was my father and mother.
Tar sands was good for <> 85 years.
The tar sands it is.
How about you stop by sucking up to oil companies by bending the truth.

Don

Originally Posted by Sundancefisher

Probably you don't know but calling our oil sands tar sands is an insult to Albertans. The tar name is derived from the anti Alberta Eco fanatics.

People.

Reserve write downs are a common part of the oil and gas industry.

It has nothing to do with leaving anything in the ground.

If written down you are saying with current commodity prices they don't envision developing anytime soon.

When prices rebound they get added back in.

Avb has yet again posted a story with a global warming agenda. Evil oil. Oil industry failing. Green power so yummy.

Lol

[Sundancefisher]

Originally Posted by catnthehat

Have you even been here ?
I can show you bitumen oozing out of the hills in the summer and pools of tar.
ave fixed canoe ks with the stuff, as did the natives that the first white explorers noticed when they came up here
The tar floating down the Ells river renders fishing impossible at times wit big globs of bitumen tar that grabs onto your line an mess up your rod and reel.
Cat

Yes. I have some on my desk. With a glove on I have squeezed oil saturated bitumen.

[Sundancefisher]

Originally Posted by Don Andersen

Sundance,

Once again you have demonstrated your profound ignorance. I was born here as was my father and mother.
Tar sands was good for <> 85 years.
The tar sands it is.
How about you stop by sucking up to oil companies by bending the truth.

Don

What is your hands on experience in the oil industry?

The point is the Eco movement uses the tar sands term in a derogatory manner. Therefore preference in the current times is to use oil sands. That is a fact. Profoundly.

[catnthehat]

Originally Posted by Sundancefisher

What is your hands on experience in the oil industry?

The point is the Eco movement uses the tar sands term in a derogatory manner. Therefore preference in the current times is to use oil sands. That is a fact. Profoundly.

And those of us in the Tarsands DO NOT use it as a derogatory term.
The anti oil people can call it anything the want t as far as I am concerned it will not change my Perception of them and and am pretty certain that they have a very different opinion of oilworker/hunter/carnivores like myself!
Cat

[Sundancefisher]

Originally Posted by catnthehat

And those of us in the Tarsands DO NOT use it as a derogatory term.
The anti oil people can call it anything the want t as far as I am concerned it will not change my Perception of them and and am pretty certain that they have a very different opinion of oilworker/hunter/carnivores like myself!
Cat

I agree. However as albertans we need to recognize our jobs are under attack. Whether from US Eco groups to our own government. When we join in using the derogatory terms we undermine ourselves.

Names between friends can be ok. Use outside that group can perpetuate negative connotations and negatively impact public perception. Sad but all too true.

[rugatika]

Accepted regional nomenclature aside...tar refers to a man-made substance.

[elkhunter11]

Originally Posted by Sundancefisher

What is your hands on experience in the oil industry?

The point is the Eco movement uses the tar sands term in a derogatory manner. Therefore preference in the current times is to use oil sands. That is a fact. Profoundly.

I happen to have over 35 years hands on experience in the tar/oil sands industry, how much hands on experience do you have in the industry? I use either term interchangeably, and I don't find either term to be offensive. However, I find you trying to tell those of us that have lived and worked in the area, and the industry for decades that the tern tar sands is offensive to Albertans, based on what you have read ,to be annoying

[avb3]

Originally Posted by Sundancefisher

Probably you don't know but calling our oil sands tar sands is an insult to Albertans. The tar name is derived from the anti Alberta Eco fanatics.

People.

Reserve write downs are a common part of the oil and gas industry.

It has nothing to do with leaving anything in the ground.

If written down you are saying with current commodity prices they don't envision developing anytime soon.

When prices rebound they get added back in.

Avb has yet again posted a story with a global warming agenda. Evil oil. Oil industry failing. Green power so yummy.

Lol

This is a financial story that affects a significant part of our economy. It is factual, and obviously what happens in other parts of the world affect us. Your attempt at minimizing this is myopic, and by attempting to misdirect you categorization, you are doing the stereotypical ostrich thing.

I thought better of you than that. (I'd still go fishing with you though.)

[Sundancefisher]

Originally Posted by elkhunter11

I happen to have over 35 years hands on experience in the tar/oil sands industry, how much hands on experience do you have in the industry? I use either term interchangeably, and I don't find either term to be offensive. However, I find you trying to tell those of us that have lived and worked in the area, and the industry for decades that the tern tar sands is offensive to Albertans, based on what you have read ,to be annoying

You may be valid in annoyance that the world uses the term tar sands in a derogatory sense and may wish to ignore that fact or better yet try to reclaim its use in a positive way...however the fact remains it is used in a derogatory way when describing Alberta and the oil sands resource that we own.

[elkhunter11]

Originally Posted by Sundancefisher

You may be valid in annoyance that the world uses the term tar sands in a derogatory sense and may wish to ignore that fact or better yet try to reclaim its use in a positive way...however the fact remains it is used in a derogatory way when describing Alberta and the oil sands resource that we own.

I don't find the term tar sands the slightest bit offensive, so regardless of what some people's intent is in using the term, they aren't going to offend me. In fact, I actually feel sorry for anyone that does feel offended by the term.

[fishtank]

its all about money, big corporation write down have many reason... but mostly its about money , the Tar sand in the ground not going anywhere. Just a matter of creative accounting to save tax money.