Major oil companies in the US market have recently come under intense pressure to ramp up production as oil prices skyrocket amid an increasingly tight supply market.
At the same time, the US government and EU countries around the world are looking for more oil and gas reserves. According to the latest research by energy consultancy Wood Mackenzie, more than half, exactly 65% of the oil and gas discovered in the world, is under the control of national oil companies.
Experts say this is “bad” news because in addition to national oil companies such as Saudi Aramco, QatarEnergy and Abu Dhabi Adnoc, companies with abundant reserves also include Russia’s Rosneft and Gazprom, National Iranian Oil Company and Venezuela’s PDVSA.
According to Wood Mac analysts, these seven companies could continue producing oil and gas at current rates for the next 40 to 60 years, or even longer if they tap into full spare capacity.
National oil companies have discovered 41% of total new oil and gas reserves in conventional resources since 2011. In addition, the share of national oil companies in new oil discoveries has increased. has increased since 2018 as the energy transition has fueled the development of their exploration strategies, the report said.
In total, the national oil companies have discovered more than 100 billion barrels of oil since 2011, twice as much as the other oil companies combined. For now, however, it appears that oil and gas companies, particularly in the Middle East, do not have much incentive to increase spare capacity, especially as oil prices begin to fluctuate wildly under the weight of concerns about the future.
Towards a “greener” future
The countries of Europe or the US are moving towards an economic model that is less and less dependent on fossil fuels.
An argument from environmental groups such as Ember has argued that these barrels of oil and cubic yards of gas are future stuck assets that will be obsolete by the middle of this century.
In the last 6 months, especially the last 3 months, countries like the US and Europe have seriously reconsidered what the current priorities should be. They were both once oil and gas hardliners, but have also turned cautious as energy security overtakes emissions for the first time in years.
The governments of Europe and the United States, two of the largest global consumers of oil and gas, believe that a refocus on energy security will be short-lived. Oil and gas will only be needed for a few more years, they argue, until we have built enough wind farms and solar farms. Coal will be the same way.
However, the fact that Europe is signing a long-term contract for US LNG is a recognition that oil and gas will most likely only be needed for decades within a few years.
Only seven companies can supply that amount of oil and gas for decades, without the need for regulators, governments or investors that private oil companies have suffered over the years.
The future is open and in the hands of national oil companies.
Reference: Oil Price
