Reply #16: Oil Majors' Return On Exploration Negative For 3 Years Straight [View All]

[hatrack]

Greenspin needs to spend a little more time reading the industry journals - this is from Wood McKenzie, which is one of the world's leading oil trade analysts.

"THE world’s biggest oil companies are failing to get value for money when they search for new reserves, according to the findings of a new report.

Research by energy consultancy Wood Mackenzie showed the commercial value of oil and gas discovered over the past three years by the ten largest listed energy groups was well below investment made in exploration. The report comes as global oil firms are considering how far to boost exploration budgets after years of falling investment. It also comes as oil prices are hitting record highs on the back of soaring demand and limited surplus supplies.

The oil majors are investing heavily in developing known fields in regions such as the United States Gulf of Mexico and west Africa, which should guarantee production growth for the next four years. Robert Plummer, corporate analyst at Wood Mackenzie, said: "After that they will need more discoveries to maintain growth - the problem is exploration has not been generating returns."

Wood Mackenzie said the ten leading oil groups spent around £4.5 billion on exploration last year, but this only led to commercial discoveries with a net present value of about £2.2bn. The previous two years show similar, less dramatic, shortfalls."

EDIT


http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=115x15408