The Rising Influence of Rising Affluence

[DewDiligence]

XOM—$20B for Canadian oilsands may be for naught:

https://www.wsj.com/articles/energy-companies-face-crude-reality-better-to-leave-it-in-the-ground-1487327406

…Exxon Mobil Corp. has said that as many as 3.6 billion barrels of oil that it planned to produce in Canada in the next few decades is no longer profitable to extract. A disclosure is expected in the coming week.

The step stems from U.S. regulations that require companies to take oil reserves off their books if they aren’t profitable at existing prices or can no longer be included as part of five-year development plans. The company said it still expects the reserves will be developed and again be added to its totals if prices rise, costs fall or its operations improve. It has stopped short of taking a financial write-down on its Canadian assets.

The acknowledgment by Exxon, after the company spent about $20 billion to put the oil sands at the center of its growth plans, highlights how dramatically the prospects of the region have dimmed.

Several other Big Oil companies are facing the same issue.