A Review of the Nigerian Energy Industry

ExxonMobil expects output to decline this year

09 March 2012, Sweetcrude, HOUSTON – Exxon Mobil says its output is likely to drop by 3% this year, but insists production will still grow by an average of 1% to 2% a year over the next five years.

The US oil giant witnessed a one per cent rise last year, to 4.5 million barrels of oil equivalent per day.

It was reported as saying in an annual presentation to analysts at the New York Stock Exchange that its production of liquids would grow by 2% to 3% on average through 2016, while its gas output would rise by 0.5% to 1%.

Over 2011, ExxonMobil replaced 107% of its annual production, increasing proved reserves by 1.8 billion barrels of oil equivalent to 24.9 billion barrels.

The company spent a total of $36.8 billion in 2011, slightly less than the $37 billion per year it expects to spend annually for the next five years.

That spending will go toward nine major project start-ups this year and in 2013, the company said, which will help it bring on new production of more than 1 million barrels of oil equivalent per day over five years.

The start-ups include four projects in West Africa, Kashagan Phase 1 in Kazakhstan and the Kearl oil sands project in Canada.

“The industry is in a period of high capital investment,” chief executive Rex Tillerson told the meeting, Reuters reported.

Tillerson said that even with significant efficiency gains, ExxonMobil expects global energy demand to increase by 30% between 2010 and 2040.

Demand for electricity will make natural gas the fastest growing major energy source, he predicted, estimating oil and natural gas would meet 60% of energy needs over the next three decades.

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