International Exploration by Independents

BERTAGNE, ROBERT G., Marex, Inc., Houston, TX

Recent industry trends indicate that the smaller U.S. independents are looking at foreign exploration opportunities as one of the alternatives for growth in the new age of exploration.

It is usually accepted that foreign finding costs per barrel are substantially lower than domestic because of the large reserve potential of international plays.

To get involved overseas requires, however, an adaptation to different cultural, financial, legal, operational, and political conditions. Generally foreign exploration proceeds at a slower pace than domestic because concessions are granted by the government, or are explored in partnership with the national oil company.

First, a mid- to long-term strategy, tailored to the goals and the financial capabilities of the company, must be prepared; it must be followed by an ongoing evaluation of quality prospects in various sedimentary basins, and a careful planning and conduct of the operations.

To successfully explore overseas also requires the presence on the team of a minimum number of explorationists and engineers thoroughly familiar with the various exploratory and operational aspects of foreign work, having had a considerable amount of on-site experience in various geographical and climatic environments.

Independents that are best suited for foreign expansion are those that have been financially successful domestically, and have a good discovery track record.

When properly approached foreign exploration is well within the reach of smaller U.S. independents and presents essentially no greater risk than domestic exploration; the reward, however, can be much larger and can catapult the company into the "big leagues."

AAPG Search and Discovery Article #91004 © 1991 AAPG Annual Convention Dallas, Texas, April 7-10, 1991 (2009)