Northwest Australia provided some success stories for 2008 – especially its northwest offshore region. Shown here, 2007’s Brunello-1 in the Carnarvon Basin.
On the opening day of trading in 2008 oil hit $100 a barrel for the first time. On July 7 West Texas Intermediate hit over $150 and settled at $145.29.
At that time there was much talk of “peak oil,” and speculation by huge banks and hedge funds that were blamed with inflating the price of a crude by as much as 60 percent.
But by the end of 2008 oil had hit five-year lows, shedding over $100 a barrel, as the global economy ran out of gas – figuratively, of course.
Companies that had budgeted on $80 oil were at mid-fiscal year cutting way back on capital expenditures, shutting down projects and stacking rigs.
In December, Merrill Lynch predicted that oil prices are likely to keep falling until well into 2009 and could reach $25 a barrel before recovering.
Its research report also said oil prices should begin to rally in the second half of 2009.
But Merrill Lynch, one of the best-known securities houses in the world, was itself a casualty of the economic meltdown of 2008. The forecast was issued just one hour before it was announced that its shareholders voted to be acquired by Bank of America. (We’re pretty sure they didn’t predict that this time last year.)
With a backdrop of dramatic global change in ’08 that recorded both thrills and agonies, there were some historic discoveries.
“Amidst the demands of a deepening global economic recession the oil industry also faced dwindling access to supplies and slowing production,” said Ken White, senior editor at IHS Energy International Oil Letter. “Yet against the odds, the industry managed to achieve significant levels of success.
“This is particularly true of Latin America,” he added, “where Brazil had an outstanding year recording five of the top 10 hydrocarbon discoveries of 2008 according to the IHS listing.”
At the top of the listings is the Iara discovery drilled by Petrobras in the Santos Basin with reserve estimates of 3.5 billion boe, prompting comments last May by the president of Brazil about possibly joining OPEC.
White also noted that national oil companies operated 50 percent of the top 10 discoveries based on reserves.
As for 2009, White said the major players “have found themselves with large cash assets, while smaller exploration companies are finding it almost impossible to raise necessary funding to complete desired work programs.
“There is growing evidence of shrinking capital expenditure budgets going into 2009, a year that seems likely to see the market in predatory mood.”
Predatory is a good description, since the global economy has become more of a jungle than a marketplace.
But in the rarified atmosphere of triple-digit oil with (at one time) no end to the price trajectory in sight, 2008 was undeniably a watershed year of change, one that definitely will be remembered in history.
An extensive country-by-country listing can be accessed via the menu to the left.
Editor's note: Data provided by IHS Energy.