Saudi Arabia’s King Abdullah has been quoted in newswires ordering a halt to oil exploration operations, in order to save the hydrocarbon wealth in his Kingdom for future generations.
But exploration itself is all about learning more, investigating the resources and reservoirs, and looking for new finds. The “E” in E&P doesn’t necessarily drive the “P”, or does it?Â
On the one hand, exploration activity conducted now might represent something of a bargain, still way below the crazy costs which materialised when oil was $147 a barrel, when every man and his dog wanted to know whether there was oil beneath his feet.
However, once a resource is known about, there will be the overwhelming temptation to start pumping it out the ground, flooding national coffers with petro dollars, which in turn can stimulate massive public spending projects, but at the same time depleting a reserve which cannot be replaced.
Rumours abound that Saudi Arabia will be boosting its operational drilling rig count significantly by year-end, but the Royal request may put the brakes on further development this year. I guess we’ll find out in the next couple of months.
We’re interested to hear you views on whether now is a great time to explore, or whether its, sometimes better not to know. Post your thoughts here, and we’lll see what the general consensus is.
To drill, or not to drill? That is today’s question.
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