Jan - June 2007 Disappointing For Oil Majors - All But XOM Likely To Post YOY Declines - Rigzone

[hatrack]

EDIT

With the exception of Exxon Mobil Corp. (XOM), the largest publicly traded energy company in terms of market capitalization, companies are expected to post year-on-year decreases in output this year. Analysts forecast that ExxonMobil will keep hydrocarbons output steady at 4.23 million barrels a day. Chevron Corp. (CVX) and ConocoPhillips are expected to post declines.

Exxon's output for the first half of 2007 was down 2%, largely on a drop in natural-gas volumes due to mild weather in Europe. Chevron's output decreased 0.7% to 2.637 million barrels of oil equivalent a day due to new contracts in Venezuela that allocate less crude to the company and due to lower U.S. output. "We're focused on making quality investments to maximize long-term shareholder value, not meeting an arbitrary production target," said Gantt Walton, an ExxonMobil spokesman.

ConocoPhillips' output for the first half of 2007 was up almost 5% on strong natural-gas output, but this increase included output of the Burlington Resources' acquisition, which was not included in the first half of 2006. Due to its exit from Venezuela, the company says its third-quarter output will be lower, dragging down entire year's performance.

A.G. Edwards estimates that Chevron's oil and gas output for the whole of 2007 will drop by 1% to 2.64 million barrels of oil equivalent a a day. ConocoPhillips is seen down by 2% to 1.91 million barrels a day. Chevron said it expected production in the second half of this year to be similar to that of the first. "Right now, our long-range forecast of 3% growth per year from 2005 to 2010 has not changed," Chevron spokesman Mickey Driver said.

EDIT

http://www.rigzone.com/news/article.asp?a_id=48973

[phantom power]

1. There is a key conflation in this report.

If Exxon's output of NG decreased due to reduced demand, that is one thing. Production decreases due to not being able to get it out of the ground are quite another. One scenario is essentially voluntary, the other is essentially involuntary.

It's hard to have a data-driven discussion about peak-fossil, when involuntary reductions are conflated with voluntary.

I wonder if this is because economic models simply don't historically account for the concept of running out of stuff. "If production goes down, it just must be some economic interplay of supply and demand"