Coronavirus Pushes Oil Majors to Biggest Output Cuts in 17 years

Ron Bousso
Tuesday, May 5, 2020
BP's platform in Azerbaijan / Image Credit: BP

Oil and gas output from some of the world's top oil companies is set to drop by nearly 11% in the second quarter of 2020 to levels not seen in at least 17 years, according to Reuters calculations. 

The output cuts are driven by an unprecedented drop in oil consumption due to coronavirus-related movement restrictions that have led to a surge in supplies and a collapse in crude prices to levels not seen in more than two decades. 

Five of the top publicly-traded oil and gas producers, known as oil majors, have in recent weeks outlined plans to sharply reduce production from Iraq to the shale basins in the United States. 

The cumulative output for Exxon Mobil, Chevron, Royal Dutch Shell, BP and Total will drop to the lowest since at least 2003, based on Refinitiv data. 

"Our output will be down in the second quarter, and it is very uncertain how the rest of year will unfold," BP Chief Executive Officer Bernard Looney told Reuters last week. BP said it will reduce its U.S. shale oil output by 70,000 barrels of oil equivalent per day (boepd) in 2020, around 14% lower than its 2019 output of 499,000 boepd. 

It is also cutting in other countries, including in OPEC nations and other major producers including Russia and Azerbaijan that agreed in March to cut output by an unprecedented 23%, Looney said. Shell Chief Financial Officer Jessica Uhl said that in some cases the production cuts are due to logistical problems such as lack of storage. 

Exxon and Chevron are slamming the brakes on oil output, with plans for combined global shut-ins of 800,000 barrels per day in response to plunging crude prices. Total said on Tuesday its production will be at least 5% lower on average in 2020 at 2.95 to 3 million boed, driven by voluntary reductions in Canada and the OPEC+ quotas.

Following is a table of planned production reductions in the second quarter of 2020, based on company guidance and Reuters calculations (in millions of boed)

          


2019  
Q1 2020
Q2 2020  
 Exxon
3.95
4.05
3.65
 Chevron 3.06
3.242.84
 Shell3.65
3.72
2.87
 BP3.783.72
3.30
 Total
3.013.09
2.70
TOTAL

17.46

17.80

15.35

  


(Reporting by Ron Bousso; editing by Philippa Fletcher, Kirsten
Donovan)

Categories: Energy Middle East Activity Europe Production North America

Related Stories

Yinson, PTSC Get $600M Contract for Vietnam-Bound FSO

Yinson, PTSC Get $600M Contract for Vietnam-Bound FSO

KBR-SOCAR Joint Venture Secures Work for BP in Azerbaijan

KBR-SOCAR Joint Venture Secures Work for BP in Azerbaijan

Santos and QatarEnergy Agree Mid-Term LNG Supply

Santos and QatarEnergy Agree Mid-Term LNG Supply

CNOOC Signs Hydrocarbons Exploration and Production Deal with Kazakhstan

BP Expands Oil and Gas Scope in Azerbaijan with New Projects and Exploration Rights

EnQuest Bags Two Production Sharing Contracts off Indonesia

China's ENN, Zhenhua Oil Ink LNG Supply Deals with ADNOC

CNOOC Puts Into Production New Oil Field in South China Sea

Pakistan’s OGDC to Start Production at ADNOC’s Offshore Block by 2027

VARD Snags $125M Shipbuilding Deal for Subsea Construction Vessel

Current News

BP, ONGC, Reliance Industries Ink Deal for Offshore Exploration in India

Allseas-Boskalis Consortium Bags $1.4B Offshore Gas Pipeline Job in Taiwan

CNOOC Brings New Offshore Gas Field On Stream

Yinson, PTSC Get $600M Contract for Vietnam-Bound FSO

PTTEP Buys Chevron's Hess Unit Share of Southeast Asia’s Offshore Block for $450M

Valeura Energy, PTTEP Partner Up on Gulf of Thailand Blocks

Sapura Scoops Over $118M for Chevron, PTTEP Subsea Ops off Thailand

Pandion Energy Divests Interests in Three Norwegian Assets to Inpex

China Starts Production at Major Oil Field in Bohai Sea

Dutch Contractor Completes Malaysia’s Largest 'Rig-to-Reef' Decom Project

photo

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com