LONDON – After a decade of zero growth, research showed that global oil production will increase by 20% by 2020.
According to a study by research firm Wood Mackenzie, Major oil companies BP, Shell, Exxon Mobil, Chevron, ConocoPhillips, Statoil, Eni, and Total will increase its production from 8million barrels per year to 10million by the end of this decade.
“There was a period in which they were relatively out of the game of exploration, but I think they are back there,” says Andrew Latham, vice president of Wood Mackenzie.
“Example, Exxon entering Kara Sea (Russia) and Statoil entering the Russian Barents Sea is evidence of their desire to take a lot of new risk plays a very high cost,” he adds.
Latham cites other examples such as Shell and Conoco’s exploration off the coast of Alaska and BP’s entry in the Canadian Beaufort Sea. BP’s newest entry was in addition to the waters off the southern coast of Australia.
The lack of growth for large companies has been a major concern for investors. This is not only because it did not increase production, but have been unable to replace it with new reserves . Moreover, this was at a time when the great triumphs of exploration have been carried out by independent companies such as Tullow and Anadarko.
WoodMac estimated that only half of the eight major oil companies in the world were able to replace the stocks that were used up the previous years. But also sees that a significant increase will be seen this year due to new explorations.
“This year, the weighted average (exploration expenditure) is 15% higher than last year. At least stopped the decline in market share,” says Latham.
Brazilian Big Game
Global exploration spending for conventional oil and gas has more than quadrupled in the last decade. In fact, it has been noted to reach the 85.000 million this year.
However, much of that increase is attributed to global inflation led by higher costs for services, labor, steel and energy. Thus, the increase only results to only 30% of additional activity, according to WoodMac.
But the exploration of conventional oil and gas continues to find significant reserves and exceeds the discoveries of unconventional resources, says Latham.
During the last decade, the discoveries of total global reserves had an equivalent average of 20 million barrels per year, with Brazil as a major source of growth.
WoodMac estimates 30 dug wells in oil pre-salt Santos in Brazil and found 30 million barrels of oil equivalent.