• 3 minutes Don't sneeze. Coronavirus is a threat to oil markets and global economies
  • 5 minutes Boris Johnson taken decision about 5G Huawei ban by delay (fait accompli method)
  • 9 minutes This Battery Uses Up CO2 to Create Energy
  • 12 minutes Shale Oil Fiasco
  • 2 hours Historian Slams Greta. I Don't See Her in Beijing or Delhi.
  • 18 hours We're freezing! Isn't it great? The carbon tax must be working!
  • 2 days Indonesia Stands Up to China. Will Japan Help?
  • 1 day US (provocations and tech containment) and Chinese ( restraint and long game) strategies in hegemony conflict
  • 5 mins Let’s take a Historical walk around the Rig
  • 17 hours Beijing Must Face Reality That Taiwan is Independent
  • 1 hour Tesla Will ‘Disappear’ Or ‘Lose 80%’ Of Its Value
  • 2 hours Trump has changed into a World Leader
  • 1 day Might be Time for NG Producers to Find New Career
  • 2 days Environmentalists demand oil and gas companies *IN THE USA AND CANADA* reduce emissions to address climate change
  • 2 days Anti-Macron Protesters Cut Power Lines, Oil Refineries Already Joined Transport Workers as France Anti-Macron Strikes Hit France Hard
  • 3 days Angela Merkel take notice. Russia cut off Belarus oil supply because they would not do as Russia demanded
Alt Text

How China Could Restart The U.S. Oil Export Boom

China may resume purchases of…

Alt Text

Oil Prices Head Lower Despite Small Crude Draw

Oil prices continued to trade…

Alt Text

Expect A Strong Year For Oil Discoveries

Despite the kickback from the…

Precise Consultants

Precise Consultants

’Precise Consultants is a London based technical recruitment consultancy that supplies specialist personnel to the offshore oil and energy industry. The company was founded by…

More Info

Premium Content

Is It Too Late To Avoid An Oil Supply Crisis?

Wood Mackenzie isn’t pulling any punches. “The warning signs are there – the industry isn’t finding enough oil.”

And its latest report continues in the same ‘spade is a spade’ vein: “A supply gap opens up in the mid-2020s, reaching 3 million b/d by 2030, 9 million b/d by 2035 and a formidable 15 million b/d by 2040. Barring technology breakthrough, we’ll need new oil discoveries.”

And then the crucial phrase:

“The problem is that the recent rate of commercial volumes found gives little confidence that there will be enough new discoveries to fill the gap.”

It warns that the only solution at this stage is a significant hike of at least 20% in annual investment. It unapologetically lays the finger of blame on the gradual reduction in investment during the current cycle.

Without a commitment to drive new discoveries, there will be consequences. Prices would of course rocket. Companies’ growth targets would be under the spotlight and would inevitably lead to increased numbers of mergers and acquisitions.

However it may even be too late to avoid difficulties altogether. Given that the average length of time between discovery and peak production is the best part of a decade, we’re already running short.

But it urges action nonetheless.

Firstly: sort out capital availability: “the duty to shareholders’ interests cannot be myopically short-term.” In recent times the focus has shifted from growth to profitability and returns. Energy stocks aren’t what they once were on Wall Street.

Next: the reward has to justify the risk. It’s a fact that the checks and balances the industry developed post-crash means greater returns – ‘double-digit...in 2017, the highest for more than a decade.” So exploration is now better placed to deliver ROI.

And finally, head to the frontier. At the start it pays tribute to the delivery from Guyana, and names Suriname, Mexico, Senegal, Australia and others are being the “most eagerly watched potential play opening wells”.

By Precise Consultants

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage




Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play