Experts have said that 2013 may have been the worst year since 1995 for oil exploration. International Oil Companies (IOCs) are expected to cut investment in exploration projects across the globe, Reuters are reporting.
“It is becoming increasingly difficult to find new oil and gas, and in particular new oil. The discoveries tend to be somewhat smaller, more complex, more remote, so it is very difficult to see a reversal of that trend. The industry at large will probably struggle going forward with reserve replacement.” Tim Dodson, the exploration chief of Statoil, told Reuters.
As a result, exploration will probably be cut, especially in the newest areas, said Lysle Brinker, the director of energy equity research at consultancy firm IHS.
“They’ll be scaling back on some exploration, like the Arctic or the deepest waters with limited infrastructure. Places like the Gulf of Mexico and Brazil will continue to see a lot of activity, but frontier regions will see some scaling back,” he said.
Oil majors, which have a large resource base to maintain, are suffering the most, as the world is running out of very large conventional oil fields, and access to acreage, particularly in the Middle East, is limited.
That is leaving them with an increasing number of gas projects.
“When you look at the mix of oil and gas of the majors, it is definitely moving towards gas – simply because they can’t access conventional oil, which ultimately I believe will have an impact on oil prices,” said Ashley Heppenstall, the CEO of Sweden’s Lundin Petroleum.
