US oil major ExxonMobil said it plans to spend a record $37 billion annually in capital projects for the foreseeable future, becoming the latest oil giant to unveil an eye-popping capital budget aimed at boosting production and reserves.
The company, a key player in Nigeria's Oil and Gas sector also announced that additions to its proved reserves in 2011 totalled 1.8 billion oil-equivalent barrels, replacing 107 per cent of production.
US oil major ExxonMobil said it plans to spend a record $37 billion annually in capital projects for the foreseeable future, becoming the latest oil giant to unveil an eye-popping capital budget aimed at boosting production and reserves.
The company, a key player in Nigeria's Oil and Gas sector also announced that additions to its proved reserves in 2011 totalled 1.8 billion oil-equivalent barrels, replacing 107 per cent of production.
An annual report filed with the Securities and Exchange Commission, reported by Dow Jones at the weekend revealed that "The corporation anticipates an investment profile of about $37 billion per year for the next several years," Exxon Mobil said in. "The corporation's financial strength enables it to make large, long-term capital expenditures."
The figure, the report noted is slightly higher than the record $36.8 billion the Texas-based oil major invested in 2011 and a jump from the $32.2 billion it spent in 2010.
The announcement marks the rebirth of a trend towards bigger spending by the oil majors that was interrupted by the financial crisis, which caused oil prices to tumble in 2008, the newswires added.
A recovery in crude prices has led the majors to shrug off the uncertainty and keep boosting spending as they seek to fund the projects that will drive production growth and replenish reserves for decades.
The report noted that part of the increased spending comes from higher costs for equipment, materials and labour. These projects are getting increasingly expensive as companies push technological boundaries to tap reserves in hard-to-reach places such as the deep water and the Arctic.
Meanwhile, the oil major said additions to its proved reserves in 2011 totalled 1.8 billion oil-equivalent barrels, replacing 107 per cent of production. The company said excluding the impact of asset sales, reserves additions replaced 116 per cent of production.
"ExxonMobil replaced more than 100 per cent of production for the 18th consecutive year," Upstream Newspapers quoted Chairman and Chief Executive Officer, Rex W. Tillerson as saying.
The company added: "Our industry-leading position is a result of our strategic focus on quality resource capture, a disciplined approach to investment, and excellence in project execution.
"During challenging times for the global economy, we continue to take a long-term view of resource development and invest throughout the commodity price cycle. Adding reserves enables ExxonMobil to develop new supplies of energy to meet future demand and support economic growth and improved standards of living".
The annual reporting of proved reserves is the product of the corporation's long-standing, rigorous process that ensures consistency and management accountability in all reserves bookings.
The corporation's reserves additions in 2011 reflect new developments with significant funding commitments as well as revisions and extensions of existing fields resulting from drilling, studies and analysis of reservoir performance.
Reserve additions from the Kearl Expansion Project in Canada totalled 1 billion oil-equivalent barrels. Proved additions were also made in a diverse range of countries including the US, Nigeria, Norway, Indonesia and Malaysia. Asset sales in 2011 reduced proved reserves by 141 million oil-equivalent barrels.
Liquid additions totalled 1.4 billion oil-equivalent barrels for a 166 per cent replacement ratio and gas additions totalled 0.4 billion oil-equivalent barrels for a 49 per cent replacement ratio.
At year-end 2011, ExxonMobil's proved reserves base increased to 24.9 billion oil-equivalent barrels. The proved reserves base is split 49 per cent liquids and 51 per cent gas.
The long-term nature of the industry, and the large size of the discrete projects that provide a significant portion of the corporation's reserves additions, make it appropriate to consider a time horizon longer than a single year.
The 10-year average reserves replacement ratio is 121 percent, with liquids replacement at 99 per cent and gas at 150 per cent. The reserves additions made during this period comprise a diverse range of resource types and have broad geographical representation. ExxonMobil's reserves life at current production rates is 15 years.
ExxonMobil added 4.1 billion oil-equivalent barrels to its resource base in 2011, driven primarily by resource additions from the United States and Canada, as well as Australia, Indonesia and Vietnam.
These additions include continued success in by-the-bit exploration discoveries, undeveloped resource additions and strategic acquisitions. ExxonMobil's by-the-bit conventional exploration success in 2011 included discoveries in the US Gulf of Mexico, Australia, Indonesia and Vietnam.
In addition, discovery and delineation of North American unconventional assets contributed significantly to the resource base. Overall, the corporation's resource base grew by 2.7 billion oil-equivalent barrels to 87.2 billion oil-equivalent barrels, taking into account field revisions, production and asset sales. The resource base includes proved reserves, plus other discovered resources that are expected to be ultimately recovered.
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