Stockholm 8th February 2006. Despite intentions of oil independence by 2020, and all that will mean as the economy transitions,” business as usual” is a strong force in Sweden. The same day the Swedish press published figures showing how production and acquisition of new reserves in the world’s largest oil companies is declining, Swedish banks Nordea and SEB forecast economic growth for 2006 and 2007. Whilst the good news is that Swedes will see an improvement in their consumption, these developments and attitudes make Sweden more vulnerable to coming energy shortfalls.
According to SvD, Shell, and Exxon showed slightly lower production figures for 2005 compared with 2004. Hurricanes included, these falls in production were not unexpected. Exxon’s total production was 4,235 million boe (barrels of oil equivalent) in 2004, 4,065 in 2005. Shell’s production fell by 6.7 percent from 3,772 million boe in 2004 to 3,518 in 2005. BP showed a slight increase, producing 3,997 million boe in 2004 and 4,014 in 2005.
For the 13th year running BP reports reserve acquisition sufficient to replace the previous year’s production. Shell reports reserve replacement of only 60 -70 percent of production. Exxon wll report later in the year. As world oil consumption is increasing these figures will mean a loss of market share for the giants.
Swedish banks seem unperturbed by oil and gas markets. Economic growth this year is expected to reach 3.3 percent (SEB), 3.6 percent (Nordea). They also believe disposable income will rise by 3.6 and 3.4 percent respectively, bringing an increase in consumption between 3.4 and 3.5 percent.
Those who would like to see a more coherent approach to oil independence would have liked to hear how the large banks are aware of oil and gas price risks and how the transition would be starting over the next two years.