Massive natural gas projects led Exxon Mobil Corp. (XOM) on Tuesday to
report the highest level of reserve additions in a decade, but the company
found less new oil deposits than it depleted in 2009.
The Irving, Texas-based oil giant added 2 billion barrels of oil equivalent to
its proved reserves last year, replacing 133% of its 2009 production. About 1
billion barrels came from two giant liquefied natural gas projects in
Australia
and
Papua
New Guinea
, the company said in a
statement, helping Exxon replace 192% of the natural gas it produced in 2009.
Exxon, the world's largest publicly traded oil company, replaced 92% of the
liquid hydrocarbons (mostly oil) it produced last year, a company spokesman
said.
The importance of gas in Exxon's reserve numbers underscores how tough it has
become in recent years for large oil companies to replenish their crude oil
reserves, as resource-rich countries exert an increasing amount of control over
exploration opportunities. Companies like Exxon and Royal Dutch Shell PLC
(RDSA, RDSB, RDSA.LN, RDSB.LN) are turning to big LNG developments and
non-traditional oil regions like
Canada
's tar
sands. In a 10-year period, Exxon has replaced 131% of its gas production and
99% of its liquids production.
"Access to crude oil resources are getting tighter and tighter," said
Fadel Gheit, an analyst with Oppenheimer & Co.
The company said its proved-reserves base rose to 23.3 billion barrels, on a
long-term pricing basis that is different from the method used by the
Securities and Exchange Commission. The amount was split nearly evenly,
comprising 51% liquids and 49% gas. Under the SEC's method, which calculates
proved reserves based on the average energy prices for 2009, replacement was
1.5 billion barrels, or 100% of last year's production.
The role of gas in Exxon's future looms even greater if the pending acquisition
of unconventional gas producer XTO Energy Inc. (XTO) closes this year. At
Friday's close, the deal was valued at $26.9 billion. At the same time, Exxon's
$4 billion bid for Kosmos Energy LLC's stake in a giant oilfield in offshore
Ghana
, one
of the world's most promising regions for oil exploration, is being met with
stiff resistance from that country's government.
Some analysts say that crude oil--which trades at relatively high prices
despite the recession--is more profitable in the near term. But Oppenheimer's
Gheit says there's a "silver lining" in the natural gas business that
could enhance Exxon's long-term profitability.
"The cost of producing gas is fraction of the cost of producing oil,"
Gheit said.
Exxon has touted natural gas as a clean fuel source that will meet increasing
demand in coming decades.
Shares of
Exxon recently were up 1% at $65.48.