I posted another note about this very same story just a few days ago. But that was before XOM wrote of its entire western Canadian investment. Wow, wow, wow.
From Bloomberg: Canada's Fading Oil Promise Leaves US Majors Struggling.
Oil-sands investments in Western Canada that gobbled tens of billions of dollars over the past decade are proving an Achilles heel for some of the world’s biggest energy producers.
Exxon Mobil Corp. slashed proved reserves the most in its modern history after removing the entire $16 billion, 3.5-billion-barrel Kearl oil-sands project from its books on Wednesday.
That followed ConocoPhillips’ announcement a day earlier that erased 1.15 billion oil-sands barrels, plunging its reserves to a 15-year low.
While prolific shale plays in Texas and Oklahoma are going through an investment boom with oil above $50 a barrel, the oil sands have fallen out of favor. Current investments in the region amount mostly to long-planned expansions by large Canadian producers like Suncor Energy Inc., while majors like Statoil ASA have sold assets. Suncor, which took over Canadian Oil Sands Ltd. less than a year ago, is down more than 3 percent this year in Toronto.
The oil-sands operations in northern Alberta are among the costliest types of petroleum projects to develop because the raw bitumen extracted from the region must be processed and converted to a thick, synthetic crude oil.
In addition, Canadian crude sells for less than benchmark U.S. crude because of the added cost to ship it to American refineries and an abundance of competing supplies from shale fields. That’s why the oil sands have been particularly hard hit by the worst oil slump in a generation.
The combined 4.65 billion barrels of oil-sands crude removed from Exxon’s and Conoco’s books are worth $183 billion, based on current prices for the Western Canada Select benchmark. The revisions hit as both U.S. companies, along with the rest of the oil industry, strove to recover from a 2 1/2-year market slump that collapsed cash flows, wiped out hundreds of thousands of jobs and prompted many explorers to cancel their most ambitious drilling programs.Much, much more at the link.
Of course, now that production is dropping -- and dropping precipitously -- in western Canada, "peak theorists" will tell us that, yes, indeed, another sign of peak oil, as oil production is falling, just as predicted by M. King Hubbert predicted.
Peak oil? What peak oil?