Trends in Oil & Gas Exploration: who’s winning and where?

Maybe it is just me, but this seems to me a pretty unstructured ramble through various issues and doesn't really answer the question in the title:

"Trends in Oil & Gas Exploration: who’s winning and where?"

More particularly, whilst one can clearly see that technically-challenging drilling is likely to favour larger companies (especially in Iraq and deep offshore), it isn't at all clear to me that the majors and bigger independents are going to be the only winners...... though it may well mean that smaller companies may struggle in situations where they are trying to go toe to toe with the larger companies in a battle for drilling resources and/or political attention, if they try to do so in Iraq and elsewhere. Few small independents (or their directors and shareholders) are delusional in that regard, though.

And then there is the issue of timescales. With major field developments requiring large multi-year commitments, it is undoubtedly true that only the larger companies or the resource-short NOCs will take the challenges all the way - but that doesn't mean that smaller companies can't play a part in the process....or that they can't add shareholder value along the way!

ee

As you say ee the theme is not really answered but its a good question.

It does in part start to frame the question I had in my mind last week as to "why Tullow are so repeatedy sucessful". Is it a person, a conviction, technology, a belief, luck.
A few years back they certainly had a major restructure, part flight from traditional plays, and got into what a lot of people saw a whacky and risky back then.

In other words the "differentiators" in certain companies right now that you might not see from a presentation or news release.

I recall the years ago bp were particularly sucessful in exploration, but in only one part of the company. This was examined and the formula pushed through out the company.

I guess it starts with the people, and the knowledge of why oil collects in the places it does(rift valley theory etc)
Then the technology
Then the conviction.

FH

It does in part start to frame the question I had in my mind last week as to "why Tullow are so repeatedy sucessful". Is it a person, a conviction, technology, a belief, luck. A few years back they certainly had a major restructure, part flight from traditional plays, and got into what a lot of people saw a whacky and risky back then.

This is quite a useful question to ponder. It seems to me that it is a mix of many factors: conviction certainly - coupled with an ability to get the right deals/assets - and an ability to finance a suffiently-aggressive programme to prove the assets up. [Spare a thought for Dana - didn't have enough conviction and finance to drill Ghana sole-risk and couldn't persuade others to farm-in.......and then Tullow succeed a few years later on/near the assets they had to relinquish]

Luck isn't to be underestimated as a factor (eg I'd think SOCO could have done a great deal better if they'd had more luck testing TGD), but I suspect that once a company "gets on a roll" in a basin and really starts to understand and model the geology well, then it can continue to be relatively successful.

I don't think that one can be a risk-averse successful explorer, though, so it is important to take enough risk to give oneself a chance of succeeding.

FWIW

ee

The Kurdistan vs Iraq "scrap" for IOC funds will be one of the major battlegrounds for 2010. Whilst the economic terms for Kurdistan PSC's are quite tough they are a doddle compared to what IOC are faced with fighting over in Iraq (leaving aside the so called big prizes of lucrative but unknown exploration that IOCs are allegedly positioning themsleves for). If KRG are allowed to retain/continue with their exisiting contracts with IOCs and a mechanism is put in place for payment to KRG or IOC's for delivering crude to IOM pipelines for export then I can see Kurdistan's AIM/TSX boys winning hands down over the larger IOCs eating the crumbs from IOM's table. Initial results in the scrap will be made known once posturing resumes in full after after Iraqi elections in Q1 2010.

JPGH