The large amount of oil reserves in the world are really in the hands of whom and who will be the dominant factor in oil and gas in the future?
Major oil companies in the US market have recently found themselves under a lot of pressure to boost production, as oil prices are skyrocketing amid an increasingly tight supply market.
At the same time, the US government and EU countries are looking around the world for more oil and gas supplies. According to the latest research from the energy consulting firm Wood Mackenzie, more than half, exactly 65% of the oil and gas discovered in the world is under the control of national oil companies.
Experts say this is “bad” news because in addition to national oil companies such as Saudi Aramco, QatarEnergy and Abu Dhabi Adnoc, companies with abundant reserves also include Rosneft and Gazprom of Russia, National Iranian Oil Company and Venezuela’s PDVSA.
According to Wood Mac analysts, these seven companies could continue to produce oil and gas at current rates for the next 40 to 60 years or even longer if they tap into full spare capacity.
National oil companies have discovered 41% of total new oil and gas reserves in conventional resources since 2011. Furthermore, national oil companies’ share of new oil discoveries. has increased since 2018 as the energy transition spurred the development of their exploration strategies, the report said.
In total, the national oil companies have discovered more than 100 billion barrels of oil since 2011, twice as many as the other oil companies combined. For now, however, it seems that oil and gas companies, especially in the Middle East, are not having much incentive to increase spare capacity, especially as oil prices begin to fluctuate wildly under the weight of concerns about the future.
Towards a “greener” future
The countries of Europe or the US are moving towards an economic model that is less and less dependent on fossil fuels.
An argument made by environmental groups such as Ember, has argued that these barrels of oil and cubic meters of gas are future stuck assets that will become obsolete by the middle of this century.
In the past 6 months, especially the last 3 months, countries like the US and Europe have seriously reconsidered what the current priorities should be. They were both once hardliners on oil and gas, but have also grown cautious as energy security overtakes emissions concerns for the first time in years.
The governments of Europe and the United States, two of the largest global consumers of oil and gas, believe that a refocusing on energy security will be short-term. Oil and gas will only be needed for a few more years, they argue until we build enough wind parks and solar farms. Coal will be the same way.
However, the fact that Europe is signing a long-term contract for US LNG suggests a recognition that oil and gas will most likely be needed within years but decades to come.
Only 7 companies can supply that amount of oil and gas for decades, without the need for regulators, governments, or investors that private oil companies have suffered over the years.
The future will be open and in the hands of national oil companies.