What's new in exploration ///

ExxonMobil may have had its worst year ever for reserve replacement in 2007. The company now appears to be following a strategy that favors exploitation and unconventional resource opportunities over conventional international exploration. In a January 2008 review, ExxonMobil Exploration President Tim Cejka told Goldman Sachs that his company’s emphasis would be on exploitation of tight gas reservoirs, capturing opportunities in the LNG value chain and relying more on heavy oil resources. Kurt Rudolf, ExxonMobil chief geoscientist, provided some insight into his company’s perspective on the future of exploration at a recent presentation to the Houston Geological Society.* The title of his talk, “Current exploration trends: Prudent investments or irrational exuberance,” communicates the company’s message: Despite high oil prices, exploration is irrational in today’s highly competitive and restricted business environment. Rudolf described the unacceptable cost of international opportunity capture because of increased competition, tougher production-sharing terms by host governments.

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