Energy companies wrote down nearly 8 billion barrels of reserve after oil price drop

The U.S. Energy Information Administration has highlighted how last year's oil price drop brought on a massive writedown of high-cost Canadian oilsands reserves.

The EIA said in a brief Monday that data from 68 U.S.-listed companies shows their oilsands reserves dropped by a total of about 7.7 billion barrels, making up the vast majority of their 8.2-billion net reduction in commercially viable barrels globally.

The writedowns came after the West Texas Intermediate oil price averaged $43.44 U.S. per barrel in 2016, down 11 per cent from $48.83 U.S. per barrel in 2015.

U.S.-listed companies are required to use price averages for the past year in calculating reserves, while Canadian rules allow companies to use forward-looking prices.

Canada is estimated to have the third largest reserves of crude oil in the world at 171 billion barrels, with 166 billion of those barrels found in the oilsands.

The 68 U.S.-listed companies were left with about 16 billion barrels of oilsands reserves following their downward revisions.