'Tree' pid='15181' datel Wrote:
My count is 4 SM's remain as bidders. Goal is to extract highest price from a SM, not an IOC or NOC where best current bid may originate. Gives best immediate pps pop. Each has a reason why they cannot lose out on PRL15 or even more.
XOM stomach lose out to SHELL? NO
RDS stand losing out on PNG's best resource when they are PNG's preferred LNG operator? NO
TOT whose OSH farm-ins have PRL15, ppl 237/38 surrounded, is it efficient for them to develop lesser adjacent parcels and to miss out on the grandaddy gas aggregation by absorbing IOC acreages? NO
CVX has cash has been touring PNG has been stated to be joining Gulf LNG do they need a more profitable LNG project to balance their Aussie plays? YES
Take the needed time and get this right. The more drill success the higher those bids go.
Merry Christmas Y'all.
Fast Follower strategy… Tree isn’t that the system you use to add to your wife collection? CVX, RDS & TOT all need to feed the hopper.
http://www.ft.com/cms/s/0/79614c9c-1485-11e2-8cf2-00144feabdc0.html#ixzz2Fypa78uh
Big oil must rediscover exploration mojo
By Guy Chazan
The majors have had a poor record of finding enough new reserves
It is rare that you hear a mea culpa from the head of a major oil company.
The penitent in question is Christophe de Margerie, chief executive of Total, the French oil group. In a recent interview, he confessed his company had been “a bit too easy-going”. It had fallen down on one of its primary tasks – exploring for new sources of oil. That had to change.
“We need to be more aggressive,” he told the Financial Times. “We need to deliver more growth ... We have to insist on exploration as a priority.”
The admission seems bizarre. Can it really be true that a supermajor like Total is not doing enough to find more oil? Isn’t that precisely what the big oil companies are supposed to do?
The truth is, they do not – or at least not as much as they should. The majors spend billions of dollars every year on exploration. Yet, as a group, they have had a poor record of finding enough new reserves to replace the oil and gas they produce.
Analysis by energy consultancy Wood Mackenzie found that between 2001 and 2010 the eight majors’ reserve replacement ratio badly trailed those of the smaller independents and medium-sized players such as BG Group.
The evidence is not hard to find. The majors – with the exception of Italy’s ENI – were nowhere to be seen when vast quantities of gas were found off the coast of Mozambique last year and this. Big recent finds in Uganda, Ghana and French Guiana were made not by ExxonMobil or Royal Dutch Shell but by Tullow Oil.
The root of the problem lies in the mega-mergers of the late 1990s and early 2000s that created the behemoths we know today. The newly minted groups stayed focused on legacy areas where they had made big discoveries in the past – places like Angola and the Gulf of Mexico.
They also spent billions on vast liquefied natural gas projects in Qatar and Australia, and on the newly emerging shale gas plays in the US.
But in terms of conventional exploration – taking a punt on new, untapped basins – they dropped the ball. “If you don’t continue to feed the hopper by adding new acreage in new areas, you run out of opportunities,” says Julie Wilson, an analyst at Wood Mackenzie.
Mr de Margerie acknowledges that. For years, Total was wrapped up with absorbing rivals Elf Aquitaine and Petrofina. But speaking to investors last month, he admitted that for some time the enlarged group had “lacked new projects”.
Some consider the majors inherently disadvantaged in the race for new reserves because of their massive size.
Proponents of “small is beautiful” point to BG Group, which has 6,000 employees, compared to Shell’s 90,000, and has made 15 vast discoveries in the last 15 years.
“The time it takes between having a good idea in country X and getting it approved is very short,” says Malcolm Brown, BG’s director of exploration. “It’s one of our strengths.”
He cites the example of BG’s move into Kenya, where it signed contracts with the government for two offshore exploration blocks last year. BG had already done research on the licence area and had the technical basics in place, so was able to get an application together and submit it quickly. “Others said they couldn’t get it through their processes fast enough,” Mr Brown says.
The majors are now playing catch-up, moving into areas opened up by the independents. Such “fast followers” include Chevron, which has taken acreage in the new frontiers of Liberia and Sierra Leone, where Anadarko has found oil, and Shell and Total, which have taken stakes in Tullow’s French Guiana discovery.
They are also exploring more themselves. Shell’s spending on exploration increased by 35 per cent in 2012 to some $5bn, and it is hiring more geologists and geophysicists. Total also has a “new dynamic”, Mr de Margerie says. Its exploration potential has grown by 80 per cent since 2009, with lots of new positions in Africa and beyond. “It’s more risk, but also more potential,” he says.
The majors’ retreat from the business of exploring for and discovering oil created a vacuum which the independents have filled. The companies that found vast fields in places like the Middle East, Angola and the Gulf of Mexico have in many ways been eclipsed by more nimble players. In some cases the big new finds have been made by geologists who defected from the majors, frustrated by their cumbersome and conservative bureaucracies.
One thing is clear: the big oil companies need to rediscover their exploration mojo if they are not to fall behind in the increasingly competitive global race for reserves.
Guy Chazan is the Financial Times’ energy editor (John Authers is away)
guy.chazan@ft.com
