Published on 10 Oct 2004 by New York Times. Archived on 10 Oct 2004.
Top oil groups fail to recoup exploration costs
by James Boxell
RELATED NEWS:
The world's biggest oil companies are failing to get value for money when they explore for new reserves, according to research by Wood Mackenzie, the energy consultant.
The report shows the commercial value of oil and gas discovered over the past three years by the 10 largest listed energy groups is running well below the amount they have spent on exploration.
The findings come at a time when international oil groups are considering how far to boost exploration budgets after years of falling investment. It also comes at a time when oil prices are reaching record highs as a result of soaring demand and limited surplus supplies.
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http://www.energybulletin.net/2470.html
This story completely squares with my work experience in Major Oil companies over the last 15 years. THE INDUSTRY IS NOT finding large reservoirs. If there is no replcement then suplies must tighten with approach of PO.
So days of tall stories told by Big Texas Oil Men of how they made those tough decision to find oil in diverse parts of the world seems pretty trival now that I see the big picture. Their cost of exploration were smaller ( land costs, rigs, depth of reserves and potential size ).
Compare this to today where the above costs are much larger as supply of rigs is tighter, leases are mmore expensive driven by price of oilresulting in a potential situation where you spend $24 million to drill off shore Angola and find NOTHING.
So it is no wander that oil companies do not want to go to "Las Vegas" as much but rather buy others fields and invest money there.
Oh by the way, I do not meet many Texas Oil Men out there in the Oil Patch. They are busy producing wells with rates of 0.5 - 2 bbls/day. These wells are called STRIPPER WELLS, like Strip Poker.
