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Is Hydrocarbon Exploration Running Out of Resources to Find or Ideas to Find It?


Finding oil and gas is and never has been an easy task. All the published analysis says that since mid-80s for oil and the mid-90s for gas, exploration has on an annual basis not discovered sufficient resources to replace produced. This is largely through declining field discoveries sizes and arguably declining activity and not due exploration success rates. A simple and largely accepted exploration truth is, it has and continues to be harder and harder to find commercial reserves. Why is this? As the industry goes through another down turn we see further retrenching of our industry with fewer players and less tolerance to exploration risk. Finding hydrocarbons is an art. While land, data, technology are necessary ingredients, we need the exploration cooks, the geoscientists to mix the ingredients to create the ideas that find the oil. Today more that more than ever this is what has declined with every oil price and every industry retrenchment, the number of oil finders and ideas. If our industry belief is that it is no longer possible to replace resources, then the primary reason is the lack of oil finders generating the ideas and perhaps not the lack of resources to be found. Some countries are using simplified licensing regimes, open data systems and other ways like changes in tax regimes to promote open access for small companies to pick up land and generate ideas, Norway being a prime example. These initiatives along with industry prospect fairs and other ways of promoting ideas is trying to reinvigorate exploration within a few exploration theatres. However, the main stumbling block to turning things around is the oft-quoted belief, that overall exploration is not a “value adding activity”. Until that paradigm is overturned by companies willing to invest in idea generation to fuel exploration, the annual discovered resource volumes will continue to decline