Oil Discoveries Hit 70-Year Low

[James Regan + 1,776]

https://oilprice.com/Energy/Crude-Oil/Oil-Discoveries-Hit-70-Year-Low.html

The last three years has been the worst stretch of time in seventy years for new conventional oil discoveries.

A new report from IHS Markit finds that conventional oil discoveries plunged to a seven-decade low and “a significant rebound is not expected.” Conventional exploration – as opposed to unconventional development, including shale – had already been trending down following the 2008 global financial crisis and its aftermath, which overlapped with the rise of horizontal drilling and hydraulic fracturing in several U.S. shale basins.

But the collapse of oil prices in 2014 really knocked conventional exploration – and thus, discoveries – on its back.

But the multi-year downturn hit conventional exploration in multiple ways. Not only were companies slashing spending and cancelling riskier ventures, but the oil majors and investors began to view short-cycle shale drilling as inherently less risky. That was because drilling was quick – companies were able to turn projects around in a matter of weeks or months, not the years that large-scale conventional projects took, particularly those offshore in deepwater. Capital flowed en masse from conventional to unconventional development.

The oil majors left deep- and ultra-deepwater and began to increasingly focus on shallower water and onshore areas. The riskier fields in deepwater are the ones that have yet to be picked over, and thus contain much larger reserves, but mature shallow water carries less uncertainty and lead times are shorter. The shift in focus has meant that when a driller made a discovery, it was smaller on average in the last few years

However, the problems in U.S. shale might mean that the pendulum swings back in favor of offshore drilling. With wrecked balance sheets, high debt levels, shareholder scrutiny on spending and a growing number of operational problems, the shale complex is falling out of favor with investors. “Lackluster financial returns from unconventional production onshore in North America may drive more operators back to conventional exploration in the longer-term,” Keith King of IHS said in a statement.

"Cherry Picked Article"

70 year low in oil discoveries- Just this statement alone sums it up, if your not worried you should be, we are not showing any signs of being carbon free in 2050

Regions with huge reserves are now moving ahead before that fossil fuel remains fossilised, its completely illogical to expect the world to become carbon free and ween themselves off carbon based fuels and products in 30 years. Whats going to replace petroleum for all its wonders and products it delivers.

This is a typical sitting on the fence article we are so often presented with on not just this forum but in general. Articles swing constantly from right to left and leave the reader pondering what they just read. The reality is that this business is so fickle and heavily dependent on the daily changing geopolitical and local political agenda, peppered with spin from each regional player. In this particular article we are told about the last three years being the worse three years for Deepwater or offshore due to the costs of deepwater projects and the lucrative short term delivery of LTO. But in the same breathe we are reminded of the reckless spending and borrowing which has left the LTO industry scarred.

The LTO has plateaued on the back of cheap rigs and availability to drill out the DUCs while the price of oil was low, this in itself shows how the business model was planned coupled with greedy wall street bankers and no long term stategy. it was a bet that oil would rise again to +80$/Bbl the 50$ number is the wrath of every LTO player. The wells are drilled quickly and fall off quickly this is a fact, we are finally realising that LTO is not worth banking your economy on and time will tell, and it won't be long.

I think the buzzwords are non-conventional and conventional and very often the conventional is what we tend to rely on as its conventional and trustworthy. IMO and maybe a glimmer of hope that the Industry will come to a happy medium and spread the risk ie the unconventional with the conventional. South America in particular Brasil is most certainly be the next one to watch and we could probably include the northern coast including the Amazon Basin and Guyana (already proven and continues to impress).

Brasil has finally realised its time to pull the trigger and open up the market to free trade, or more friendly trade to IOC, next month we will see the biggest auction of Blocks in Brasil's offshore history with dozens of IOC all ready to spend fortunes on pre production royalty payments to acquire these already proven areas, this coupled with the privatisation plans of the state run Petrobras.

IMO the majors know the LTO regional USA plays are being produced with chokes wide open full bore, this is unsustainable in well management terms and coupled  with terrible fiscal management so far, the door is open again to conventional, we will see modern units taking the main brunt of the deepwater market but the market is showing older rigs are still winning new offshore contracts.

The pendulum will swing, of this I have no doubt, why would you put all your eggs in one shale-ky basket?

[Guest]

Switch to ethanol I say 

[Jabbar + 465]

19 hours ago, James Regan said:

https://oilprice.com/Energy/Crude-Oil/Oil-Discoveries-Hit-70-Year-Low.html

The last three years has been the worst stretch of time in seventy years for new conventional oil discoveries.

A new report from IHS Markit finds that conventional oil discoveries plunged to a seven-decade low and “a significant rebound is not expected.” Conventional exploration – as opposed to unconventional development, including shale – had already been trending down following the 2008 global financial crisis and its aftermath, which overlapped with the rise of horizontal drilling and hydraulic fracturing in several U.S. shale basins.

But the collapse of oil prices in 2014 really knocked conventional exploration – and thus, discoveries – on its back.

But the multi-year downturn hit conventional exploration in multiple ways. Not only were companies slashing spending and cancelling riskier ventures, but the oil majors and investors began to view short-cycle shale drilling as inherently less risky. That was because drilling was quick – companies were able to turn projects around in a matter of weeks or months, not the years that large-scale conventional projects took, particularly those offshore in deepwater. Capital flowed en masse from conventional to unconventional development.

The oil majors left deep- and ultra-deepwater and began to increasingly focus on shallower water and onshore areas. The riskier fields in deepwater are the ones that have yet to be picked over, and thus contain much larger reserves, but mature shallow water carries less uncertainty and lead times are shorter. The shift in focus has meant that when a driller made a discovery, it was smaller on average in the last few years

However, the problems in U.S. shale might mean that the pendulum swings back in favor of offshore drilling. With wrecked balance sheets, high debt levels, shareholder scrutiny on spending and a growing number of operational problems, the shale complex is falling out of favor with investors. “Lackluster financial returns from unconventional production onshore in North America may drive more operators back to conventional exploration in the longer-term,” Keith King of IHS said in a statement.

"Cherry Picked Article"

70 year low in oil discoveries- Just this statement alone sums it up, if your not worried you should be, we are not showing any signs of being carbon free in 2050

Regions with huge reserves are now moving ahead before that fossil fuel remains fossilised, its completely illogical to expect the world to become carbon free and ween themselves off carbon based fuels and products in 30 years. Whats going to replace petroleum for all its wonders and products it delivers.

This is a typical sitting on the fence article we are so often presented with on not just this forum but in general. Articles swing constantly from right to left and leave the reader pondering what they just read. The reality is that this business is so fickle and heavily dependent on the daily changing geopolitical and local political agenda, peppered with spin from each regional player. In this particular article we are told about the last three years being the worse three years for Deepwater or offshore due to the costs of deepwater projects and the lucrative short term delivery of LTO. But in the same breathe we are reminded of the reckless spending and borrowing which has left the LTO industry scarred.

The LTO has plateaued on the back of cheap rigs and availability to drill out the DUCs while the price of oil was low, this in itself shows how the business model was planned coupled with greedy wall street bankers and no long term stategy. it was a bet that oil would rise again to +80$/Bbl the 50$ number is the wrath of every LTO player. The wells are drilled quickly and fall off quickly this is a fact, we are finally realising that LTO is not worth banking your economy on and time will tell, and it won't be long.

I think the buzzwords are non-conventional and conventional and very often the conventional is what we tend to rely on as its conventional and trustworthy. IMO and maybe a glimmer of hope that the Industry will come to a happy medium and spread the risk ie the unconventional with the conventional. South America in particular Brasil is most certainly be the next one to watch and we could probably include the northern coast including the Amazon Basin and Guyana (already proven and continues to impress).

Brasil has finally realised its time to pull the trigger and open up the market to free trade, or more friendly trade to IOC, next month we will see the biggest auction of Blocks in Brasil's offshore history with dozens of IOC all ready to spend fortunes on pre production royalty payments to acquire these already proven areas, this coupled with the privatisation plans of the state 

O

Quote

 why would you put all your eggs in one shale-ky  basket?

You misspelled shaky.

I agree ethanol way to go.

Edited October 5, 2019 by Jabbar

[James Regan + 1,776]

15 hours ago, Jabbar said:

ou misspelled shaky

Ok Mr Stevens thanks for the quality reply, why bother? You should spend a little quality time fixing up your old house!

Edited October 6, 2019 by James Regan
Locking how to spell Shingles