Exxon: 20 percent of global oil and gas reserves may be wiped out
Washington. After a grim Q2 season for Big Oil, the world’s third-most valuable energy company is warning that 20% of the world’s oil and gas reserves may no longer be viable. According this to Bloomberg.
According to Exxon Mobil, one-fifth of the world’s oil and gas reserves will no longer qualify as “proved reserves” at the end of this year if oil prices fail to recover before then. A flurry of oil and gas companies have written off billions in oil and gas assets as the value of those assets in the current oil price climate is no longer what it once used to be. Exxon was not among them.
Exxon is currently reviewing its oil and gas assets, the results of which should be available by November. But Exxon has caught some flack for not making many asset adjustments over the last decade, while its Big Oil peers have.
Exxon recorded its worst quarterly loss in modern history in the second quarter of this year, booking a loss of $1.1 billion, compared to earnings of $3.1 billion in Q2 2019. Still, Exxon is not moving to cut its dividend, which analysts expect will cost the oil major $15 billion. It is, however, moving to make some job cuts, pension matching contribution cuts, and other cost discipline issues, according to various sources.
A large portion of Exxon’s shareholders are retail investors, Exxon continues to make their dividend a priority. Exxon has been demoted from the world’s second-most valuable energy company last month, as Reliance Industries unseated the supermajor from its long-held position.