(OEM) With two-thirds of global resources in their hands, seven National oil companies (NOCs) own the lion’s share of remaining discovered oil and gas resources, says Wood Mackenzie, an energy intelligence group.
Following Russia’s attack on Ukraine, the outlook for the supply, demand, and price of hydrocarbons is constantly shifting, leading to a rewriting of energy trade flows, to strengthen global energy security.
Keeping this at the forefront, Wood Mackenzie pointed out last week that NOCs discovered 41 per cent of global added conventional resources since 2011. Moreover, their share has been rising since 2018, although, as the energy transition gathers pace, their exploration strategies are also evolving due to this impact.
However, seven NOCs – QatarEnergy, Saudi Aramco, PDVSA, NIOC, Gazprom, ADNOC and Rosneft – from the Middle East, Russia and Venezuela own half of the world’s remaining resources, and these giant NOCs can continue to produce at their current rates for another 40-60 years from existing resources, explained Wood Mackenzie, adding that this could go on even longer if they convert some of what is currently considered contingent resource into commercial.
The energy intelligence player further emphasized that new volumes discovered by oil and gas importing countries’ NOCs are quickly commercialised, elaborating that NOCs consistently contribute more than a third of the world’s newly-discovered resources. The company revealed that that proportion has hit more than 50 per cent in some of the last few years.
Since all NOCs are not explorers, the role of exploration for those with abundant resources differs when compared to importing countries’ NOCs. To this end, oil and gas importers need to speedily commercialise new resources to meet energy security mandates, based on Wood Mackenzie’s assessment.
The energy intelligence firm further confirmed that even though these giant exporting NOCs are expected to far exceed their importing peers in terms of forecast production from exploration, new volumes discovered by importing countries’ NOCs – from oil from Guyana to gas from Turkey – are stacking up.
The company states that there is a vast difference between the two groups in terms of a percentage of total production. In lieu of this, new production coming from discoveries in the last decade will contribute 4 per cent of the exporting NOCs’ future production at most, while a decade from now, for every five barrels that importing countries’ NOCs produce, one will come from the fruit of exploration done in the last 10 years, outlined Wood Mackenzie.
The energy intelligence provider highlighted that much of the NOCs’ new resources are still contingent and NOCs have discovered more than 100 billion barrels of oil equivalent (boe) since 2011, which is double the tally of the oil majors. Despite this, the majors fared significantly better in terms of commerciality as about two-thirds of the volumes discovered by the oil majors are considered viable, advantaged resources. On the other hand, about two-thirds of NOCs’ discovered volumes are currently still considered contingent.
Wood Mackenzie further adds that another big contrast is that more than 75 per cent of the oil majors’ discoveries are in deep water while for the NOCs – Petrobras being a notable exception – it is only about a third.