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Monday, February 22, 2021
Big oil incurred record loss in 2020, joint output fell by 0.9 million boepd and will peak lower in 2028
The downturn brought by the Covid-19 pandemic and the accelerating energy transition has created a new reality for the world’s oil and gas industry, whose production will peak lower and earlier than expected before the 2020 market crisis, a Rystad Energy analysis shows. The five integrated supermajors – ExxonMobil, BP, Shell, Chevron and Total – posted a combined record loss of $76 billion in 2020.
The major chunk of this loss, $69 billion, can be attributed to asset impairments and write-offs as the supermajors re-evaluated their strategy to focus on energy transition and become less dependent on petroleum. Their combined oil and gas output dropped by nearly 5%, or 0.9 million barrels of oil equivalent per day, in 2020 from the year before.
Lower emission targets and demand for cleaner energy have significantly impacted the long-term production outlook for the majors. Rystad Energy forecasts that the majors’ net production will be around 17.5 million boepd in 2025 and peak at around 18 million boepd in 2028, based on our latest revisions. For context, our internal forecast in February 2020 – before the shockwaves from Covid-19 – stood at 19 million boepd for 2025 and 20 million boepd in 2028.
“Last year has certainly tested oil and gas majors like never before. Some recovery can be expected in the near future as demand rebounds and oil prices cross the $60 mark. However, the key to success for the five majors over the next decade will be to strengthen their business in more resilient regions, restructure and resize to match the market needs, and pay back their high debt levels,“ says Rahul Choudhary, upstream analyst at Rystad Energy.
View the full release on the Rystad Energy website here.
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