Rystad Energy pointed out that the five integrated supermajors – ExxonMobil (NYSE: XOM), BP (NYSE: BP), Shell (NYSE: RDS.A), Chevron (NYSE: CVX) and Total (NYSE: TOT) – have issued a combined record loss of $ 76 billion in 2020.
Rystad noted that the bulk of that loss, $ 69 billion, can be attributed to asset write-downs and write-offs as the supermajors reassessed their strategy to focus on the energy transition and become less dependent on oil. The five majors reported net losses last year, with ExxonMobil being the largest at $ 22.4 billion, followed by Shell and BP, which also suffered losses of more than $ 20 billion, Rystad said. The company said Total and Chevron fared better than their peers, relatively speaking, recording net losses of $ 5 billion to $ 6 billion.
Rystad pointed out that all the majors saw their debt ratios increase in 2020, with BP and Shell ending the year with a gear above 30%. ExxonMobil and Chevron raised a record amount of debt during the year, adding $ 19 billion and $ 18 billion respectively to their net debt, Rystad said, adding that the two majors had increased their debt ratios by 10% in 2020.
The combined oil and gas production of the five majors fell nearly five percent, or 0.9 million barrels of oil equivalent per day, in 2020, compared to the previous year, Rystad revealed. Lower emissions targets and demand for cleaner energy have had a significant impact on the majors ‘long-term production prospects, according to Rystad, who predicts that the majors’ net production will be around 17.5 million. barrels of oil equivalent per day (bpd) in 2025 and peaking at around 18 million boepd in 2028. The company’s internal forecasts in February 2020 were 19 million boepd in 2025 and 20 million boepd in 2028.
“The past year has certainly tested the oil and gas majors like never before,” said Rahul Choudhary, an upstream analyst at Rystad Energy, in a company statement.
“We can expect some recovery 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 businesses in more resilient regions, restructure and resize them to meet market needs and repay their high debt levels ” , he added.
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