The Energy Information Administration (EIA) said yesterday that global public companies representing 60% of total non-OPEC liquid fuels production spent last year $244 billion on exploration and development, down by 28% compared to the pre-pandemic average.
EIA said the decline in global refining capacity since COVID is one of the key reasons for tight fuel markets and low inventories, which have contributed to soaring gasoline and diesel prices alongside high crude prices.
The Administration’s analysis is contained in a report of 119 U.S. and international listed firms published yesterday. The report said those companies added 19.2 billion barrels of oil equivalent to proved reserves in 2021, after net purchases and production.
The EIA said its review is based on the published financial reports provided to the SEC and that Evaluate Energy has collected. The EIA further stated that the conclusions of its analysis did not include private companies that do not publish financial reports, and as such not a representative of the global exploration and production sector as a whole.
The companies in the analysis include the super majors, many public U.S. shale firms, as well as Chinese and Russian firms, among others.
Global proved reserves totaled 293 billion barrels of oil equivalent at the end of 2021, which was 6 percent higher than at the end of 2020. The 119 companies in the review reduced their combined net debt by $134 billion in 2021, and reducing net debt accounted for 26 percent of the main uses of cash in 2021, the largest debt reduction in the 2012–2021 period.
In the downstream segment, the EIA’s review based on Evaluate Energy’s data of companies showed that global refining distillation capacity decreased from 2020 to 2021.
In the U.S., some 1 million bpd of refinery capacity has been shut permanently since the start of the pandemic, as refiners have opted to either close money-losing facilities or convert some of them into biofuel production sites. In the United States, operable refinery capacity was at just over 18 million bpd in 2021, the lowest since 2015, per EIA data.
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