Today things look bleak. Oil discoveries are at a 70 year low. Few companies are aggressively exploring for new resources, layoffs continue, some bankruptcies have occurred and commodity prices continue to be volatile causing companies spend more time cutting investments than growing or even restoring their resource base. Is this current snapshot of our industry a view into the future? I would say no.
We have experienced elements of the current downturn before. Many people point to the mid-1980’s when increasing market share was the goal of one of the world’s largest and lowest cost producers. A drop in oil price, layoffs, deferral of investment all followed. The same is true today and the situation cannot last. Supply and demand will come into balance. Governments and companies will need to renew new investment to maintain production and replace what has been produced. Recent climate agreements will not impact this, as any realistic future scenario clearly shows a large contribution of oil and gas to the energy mix well past 2040.
When discussing the future of energy exploration, many past prognosticators have chosen to discuss plays or regions where activity will increase. My focus will not be on geographical areas or individual plays. Rather, I would like to talk about key factors that impact investment and people. GDP growth, field decline, OPEC behavior and US oil production will all impact company and government actions on spending and encouraging exploration. We will need to see these factors behaving in a predictable manner to encourage companies and governments to promote and increase spending on exploration. A large part of the future of energy exploration is also centered around people. Specifically, the teams of explorers that dedicate their careers to the creative and innovative application of science to find new oil and gas globally, often in the face of adversity. The need to master new technology, to interrogate data for increasingly subtle plays, to deal with governmental requirements and to navigate internal company hurdles all pose new challenges to the new generation of explorers. In my view explorers over many decades have risen above many challenges and continued to find new oil and gas deposits. Even at the low point of the current downturn, we can still point to interesting and valuable discoveries being made. Not as much nor as many as we would like/need but the point is that the exploration spirit still thrives and will do so in the future. We will find more oil and gas to fuel the energy needs of the world. The discoveries we will make will at times surprise us. However, what will never surprise anyone is the hard work, dedication, intelligence and ingenuity exhibited by explorers all over the world. We are and will always be a humble yet proud group of scientists that can and will find more oil and gas in significant quantities.
Today things look bleak. Oil discoveries are at a 70 year low. Few companies are aggressively exploring for new resources, layoffs continue, some bankruptcies have occurred and commodity prices continue to be volatile causing companies spend more time cutting investments than growing or even restoring their resource base. Is this current snapshot of our industry a view into the future? I would say no.
We have experienced elements of the current downturn before. Many people point to the mid-1980’s when increasing market share was the goal of one of the world’s largest and lowest cost producers. A drop in oil price, layoffs, deferral of investment all followed. The same is true today and the situation cannot last. Supply and demand will come into balance. Governments and companies will need to renew new investment to maintain production and replace what has been produced. Recent climate agreements will not impact this, as any realistic future scenario clearly shows a large contribution of oil and gas to the energy mix well past 2040.
When discussing the future of energy exploration, many past prognosticators have chosen to discuss plays or regions where activity will increase. My focus will not be on geographical areas or individual plays. Rather, I would like to talk about key factors that impact investment and people. GDP growth, field decline, OPEC behavior and US oil production will all impact company and government actions on spending and encouraging exploration. We will need to see these factors behaving in a predictable manner to encourage companies and governments to promote and increase spending on exploration. A large part of the future of energy exploration is also centered around people. Specifically, the teams of explorers that dedicate their careers to the creative and innovative application of science to find new oil and gas globally, often in the face of adversity. The need to master new technology, to interrogate data for increasingly subtle plays, to deal with governmental requirements and to navigate internal company hurdles all pose new challenges to the new generation of explorers. In my view explorers over many decades have risen above many challenges and continued to find new oil and gas deposits. Even at the low point of the current downturn, we can still point to interesting and valuable discoveries being made. Not as much nor as many as we would like/need but the point is that the exploration spirit still thrives and will do so in the future. We will find more oil and gas to fuel the energy needs of the world. The discoveries we will make will at times surprise us. However, what will never surprise anyone is the hard work, dedication, intelligence and ingenuity exhibited by explorers all over the world. We are and will always be a humble yet proud group of scientists that can and will find more oil and gas in significant quantities.