The future is gas – and unconventionals

We knew that Shell was moving towards gas accounting for half of its upstream production by 2012, but it appears that, on a reserves basis, it’s almost there. And some of the other supermajors aren’t far behind, according to research from Wood Mackenzie:

In fact Shell, with the highest ratio of gas to oil, also has the highest value of remaining reserves. The data below, however, doesn’t include Exxon’s acquisition of XTO, which WoodMac points out would easily put Exxon in front for commercial reserves (and presumably nudge its gas/oil ratio, too).


IOCs upstream value versus reserves

The paper also makes the point that the portfolios held by the IOCs are increasingly under pressure from resource nationalism, declining reserves and the accompanying need for more advanced technology. However:

There are still many valuable opportunities available to international players, although these are increasingly ‘volume plays’, characterised by large reserves and comparatively low contractor margins. Whether it is oil sands, tight gas, low margin OPEC oil, tight oil or other challenging reserves, these will form a larger part of international companies’ value propositions in the future. After the recent acquisitions by Shell (East Resources), ExxonMobil (XTO Energy) and others, and aggressive bidding in last year’s Iraqi licensing rounds, it could be argued that the future has already arrived.

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