Wood McKenzie - Oil Majors In 3rd Year Of Negative Return On Exploration

[hatrack]

"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://business.scotsman.com/index.cfm?id=1183112004

[phantom power]

1. The phrase "jesus fucking christ" comes to mind...

Boy would it have been interesting to pose this bit of news to the candidates at last night's debate.

Thinking back, I can't recall *any* question that focused on environmental or energy issues, at any of the four debates (although I missed the town-hall).

[hatrack]

2. "I think I've been a good steward of the land" - Do not adjust your screen

This is not an error, but an actual quote from the Chimp in the town hall debate.

Needless to say, Kerry pounded him pretty well on this farcical assertion. But the real point is in your post. That one question was the one and only time the environment ever came up in four total debates spanning six hours of live television time.

[hunter]

3. If it cost you £4.5 billion to find £2.2bn of oil...

...obviously you have to raise the price of the oil you found to at least £4.5 billion.