• 3 minutes Nucelar Deal Is Dead? Iran Distances Itself Further From ND, Alarming Russia And France
  • 5 minutes Don Jr. Tweets name Ukraine Whistleblower, Eric Ciaramella. Worked for CIA during Obama Administration, Hold over to Trump National Security Counsel under Gen McCallister, more . . . .
  • 9 minutes Shale pioneer Chesepeak will file bankruptcy soon. FINALLY ! The consolidation begins
  • 12 minutes China's Blueprint For Global Power
  • 49 mins Science: Only correct if it fits the popular narrative
  • 53 mins Crazy Stories From Round The World
  • 9 hours What are the odds of 4 U.S. politicians all having children working for Ukraine Gas Companies?
  • 7 hours China's Renewables Boom Hits the Wall
  • 14 hours EU has already lost the Trump vs. EU Trade War
  • 1 day Pioneer's Sheffield in Doghouse. Oil upset his bragging about Shale hurt prices. Now on campaign to lower expectations, prop up price.
  • 1 day ''Err ... but Trump ...?'' *sniff
  • 8 hours Do The World's Energy Policies Make Sense?
  • 8 hours Forget out-of-date 'dirty oil' smear, Alberta moving to be world's cleanest oil industry
  • 45 mins Impeachment Nonsense
  • 1 day Tesla Launches Faster Third Generation Supercharger
  • 13 hours Water, Trump, and Israel’s National Security
  • 2 days Passerby doused with flammable liquid and set on fire by peaceful protesters

Breaking News:

Russia Plans To Boost Crude Oil Exports

Alt Text

6 Technology Trends Revolutionizing The Transportation Sector

Greener and leaner transportation is…

Alt Text

Chesapeake Isn’t Dead Yet…

Chesapeake, one of the hardest…

Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

More Info

Premium Content

Shifting Strategies: Big Oil Looking At Low-Cost Fields

Oil supermajors have come to realize that shrunk capex plans will make their exploration efforts profitable in lower-cost, lower-risk areas, and have changed drilling tactics to the ‘less is more’ philosophy, a Wood Mackenzie analyst told CNBC on Monday.

“The new economics of exploration mean that rather than pursuing high-cost, high-risk exploration strategies - elephant hunting in the Arctic, for example - the majors have become more conscious of costs,” Andrew Latham, Vice President of exploration research at Wood Mackenzie, said, discussing the ‘Exploration Benchmarking – Majors 2006-2015’ report.

According to the report, oil majors invested US$169 billion in exploration between 2006 and 2015, which resulted in additional 72 billion barrels of oil equivalent (boe) added to Big Oil’s resource base.

As many as 25 billion barrels of those came from unconventional plays, which have become increasingly important for the majors’ exploration efforts. Unconventional resources accounted for 15 percent of exploration expenditure, and their returns have been outperforming returns from conventional resource exploration since 2013, according to the report.

Slashed budgets have led companies to opt for drilling in places where costs are lower, including at wells located near existing fields. Big Oil was quick to take measures in 2015 to adapt to the ‘lower-for-longer’ prices to improve exploration returns, which has resulted in higher prospect quality, according to Wood Mackenzie. Related: Can India Become An LNG Juggernaut?

“The industry now has in prospect a different – and potentially more profitable – future,” Wood Mackenzie’s Latham said.

The report also noted that gas would become increasingly important with only one-quarter of discoveries being oil and the rest being gas. Production is still tipped toward oil, however, which globally accounts for two-thirds of output.

Just last week, Goldman Sachs dashed hopes of an oil price recovery, with their head of commodity research, Jeff Currie, saying that crude would continue to trade within the US$45-50 band over the next 12 months. Any improvement above US$50 is highly unlikely, according to Currie.

By Tsvetana Paraskova for Oilprice.com

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