What’s new in exploration
When I said that BP was looking toward South America, I should have stated, “Colombia to Brazil.” Their Amoco subsidiary has been very involved in Trinidad, including to the west, for a long time. The area from Caño Limon, northeasterly to the Orinoco River, wrapping south to Guyana, has always been interesting. Venezuela is out for now. Elsewhere, Exxon is betting the farm, or should I say GOM holdings, that offshore conventional to the unsure southern countries (i.e. Guyana) may profit better. Now, THAT is exploration!
Pricing influences. “World oil prices since 2000 have been substantially higher than those of the 1990s,” is the quote from page 2 of EIA’s Annual Energy Outlook 2007 With Projections to 2030, authored by the Office of Integrated Analysis and Forecasting. So, EIA makes news with this? Could be just as true for bread or milk prices, too. A better metric would be, “how has break-even (BE) price been since 2000?” Answer: At some cut to employment, and high production costs of shale plus land, BE is better by dollars, down only slightly by relative inflation-adjusted percent. Stats will show that conventional oil still has a better BE, even offshore.
EIA was created by the Department of Energy Organization Act of 1977, Public Law 95-91, Department of Energy; Section 205. EIA influences major markets, thereby policy for decision-makers. 205(D) states, “The Administrator shall not be required to obtain the approval of any other officer or employee of the Department, in connection with the collection or analysis of any information...” The Administrator also is not required to obtain the approval of any other officer or employee of the United States. Given the tendency of a bureaucracy to self-exist, it sounds a bit Orwellian.
Mark Twain on decision-making. The danger of external influences on exploration? Once information is acquired, who decides the “where” and “how?” Let me illustrate with a story about “$250 pilots,” a 135-year-old analog to oil and gas exploration decision-making behavior, by Mark Twain, in his book from 1883, Life on the Mississippi, Chapter 14, “Rank and Dignity of Piloting”:
Once a pretty mean captain caught Stephen in New Orleans out of work and, as usual, out of money. He laid steady siege to Stephen, who was in a very “close place,” and finally persuaded him to hire with him at one hundred and twenty-five dollars per month, just half-wages, the captain agreeing not to divulge the secret and so bring down the contempt of all the guild upon the poor fellow. But the boat was not more than a day out of New Orleans before Stephen discovered that the captain was boasting of his exploit, and that all the officers had been told. Stephen winced, but said nothing.
About the middle of the afternoon, the captain stepped out on the hurricane deck, cast his eye around, and looked a good deal surprised. He glanced inquiringly aloft at Stephen, but Stephen was whistling placidly, and attending to business. The captain stood around a while in evident discomfort, and once or twice seemed about to make a suggestion; but the etiquette of the river taught him to avoid that sort of rashness, and so he managed to hold his peace. He chafed and puzzled a few minutes longer, then retired to his apartments. But soon he was out again, and apparently more perplexed than ever.
Presently, he ventured to remark, with deference—”Pretty good stage of the river now, ain’t it, sir?”
Stephen: “Well, I should say so! Bank-full is a pretty liberal stage.”
Captain: “Seems to be a good deal of current here.”
Stephen: “Good deal don’t describe it! It’s worse than a mill-race.”
Captain: “Isn’t it easier in toward shore than it is out here in the middle?”
Stephen: “Yes, I reckon it is; but a body can’t be too careful with a steamboat. It’s pretty safe out here; can’t strike any bottom here, you can depend on that.”
The captain departed, looking rueful enough. At this rate, he would probably die of old age before his boat got to St. Louis. Next day, he appeared on deck and again found Stephen faithfully standing up the middle of the river, fighting the whole vast force of the Mississippi, and whistling the same placid tune. This thing was becoming serious. In by the shore was a slower boat clipping along in the easy water and gaining steadily; she began to make for an island chute; Stephen stuck to the middle of the river. Speech was wrung from the captain. He said—
“Mr. W——, don’t that chute cut off a good deal of distance?”
Stephen: “I think it does, but I don’t know.”
Captain: “Don’t know! Well, isn’t there water enough in it now to go through?”
Stephen: “I expect there is, but I am not certain.”
Captain: “Upon my word this is odd! Why, those pilots on that boat yonder are going to try it. Do you mean to say that you don’t know as much as they do?”
Stephen: “They! Why, they are two-hundred-and-fifty-dollar pilots! But don’t you be uneasy; I know as much as any man can afford to know for a hundred and twenty-five!’
The captain surrendered. Five minutes later, Stephen was bowling through the chute and showing the rival boat a two-hundred-and-fifty-dollar pair of heels.
A painful lesson constantly being learned. 
