Today Brent crude fetches just over $40 a barrel, making about half the world’s oil reserves too costly to produce
oilmen fracked the Permian basin, they came to Prudhoe Bay. Spanning more than 800 square kilometres of Alaska’s North Slope—an area the size of New York City—it remains one of the most productive oilfields in American history. In 1977began pumping the black stuff from Prudhoe Bay, whence a new pipeline transported it over 1,300km of frigid wilderness to the port of Valdez. The project was a triumph of engineering and a testament to’s ambition.
ExxonMobil, an American behemoth that remains bullish on future fossil-fuel demand, has declined to write down its shale assets. The impairments announced byand Shell last month accompanied revisions to their forecasts for the price of Brent. Shell now expects a barrel to cost $40 in 2021 and $50 in 2022, down from the $60 it assumed in its most recent annual report.forecasts that Brent will average $55 from 2021 until 2050.
The supermajors understandably desire resources that are resilient to price swings and to climate regulations being considered in many countries to discourage the use of the dirtiest fuels. They have worked to cut costs. Last year the average oil price needed to cover capital spending and dividends for the five biggest—ExxonMobil, Shell, Total, Chevron and—was less than half what it was in 2013, according to Goldman Sachs, a bank .
In China a crackdown on corruption has made state-owned oil companies less acquisitive amid closer scrutiny of foreign deals. Companies which focus on exploration and production have faced their own pressure to boost profits now rather than growth later, given uncertainty over future demand.
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