These findings are spread over five continents are the result of heavy investments that began earlier in the decade when oil prices rose and new technologies that allow browsers to drill deeper and harder to break rocks.
«That’s the wonderful aspect with respect to price signals in a free market: put people in a better position to take more risks in exploration,» said James Hackett, president and CEO of Anadarko Petroleum.
Have reported finding more than 200 so far this year in dozens of countries, including Iraq’s Kurdish region, Australia, Israel, Iran, Brazil, Norway, Ghana and Russia. They have been carried out international giants such as Exxon Mobil, but also small industry participants, such as Tullow Oil.
Just this month (October 2009) BP said it had found a giant oil field in deep water could end up being the largest oil discovery in the history of the Gulf of Mexico, while Anadarko announced a major discovery in an «exciting and highly prospective «Sierra Leone region.
It is normal for companies to discover billions of barrels of new oil fields every year, but the pace of this year is unusually fast. The new oil finds have totaled approximately 10,000 million barrels in the first half of the year, according to data from IHS Cambridge Energy Research Associates. If the discoveries continue at that pace until the end of the year is likely to reach its highest level since 2000.
Although in recent years has been speculation about who will come to a peak and subsequent decline in oil production, industry people say there’s still a lot of oil in the ground, particularly beneath the ocean floor, even if their location and extraction is becoming more difficult. They note that prices and the pace of technological advances continue to be the factors that govern oil production capacity.
While industry is celebrating its recent findings, many executives are nervous about the immediate future, fearing that lower prices could jeopardize its momentum in the exploration. The world economy is weak, oil prices fell and the historical records for last year, corporate earnings have fallen sharply, while world oil demand remains low. After losing $ 34 in December, as oil prices doubled, stabilizing at about $ 70 a barrel. But if the world economy recovers, some analysts believe the price could drop again.
Oil companies argue that you can not afford to face that prospect. Despite record profits achieved in recent years, many executives have warned they need prices above $ 60 a barrel to develop the world’s most challenging reservations. In fact, part of the exploration activity has already reduced its passage this year, as farmers seek better conditions of service companies and contractors.
Not only oil is coming benefited from the boom in exploration. Repsol, Spain’s largest oil company, said this month it had discovered what could end up being the largest natural gas deposit in Venezuela. In recent years, companies have found substantial natural gas reserves in the United States, from slate or shale rock that was believed impossible to drill.
«The main question that the exploration teams have right now is, Where do we go now?» Said Robert Fryklund, who directed the operations of ConocoPhillips in Libya and Brazil, and is a vice president of Cambridge Energy Research Associates, Houston.
The budget for exploration soared in recent years, partly to compensate for the duplication of costs across the industry, from steel prices to the cost of renting drilling platforms in deep water. An issue of great importance to the industry today is how to achieve cost reductions while maintaining a high level of exploration. On average, costs have decreased between 15 and 20 percent from its peak, based on oil executives.
While they are significant, new findings do not match the findings of giant fields in the 70s, like Prudhoe Bay in Alaska, Ekofisk in the North Sea or Cantarell in Mexico. All these are also dwarfed by the last major discovery, the Kashagan oilfield in the Caspian Sea, discovered in 2000 and which is estimated to contain more than 20,000 million barrels of oil.
«We have not seen another Kashagan, but even these findings are very material,» noted Alan Murray, the service manager of exploration at Wood Mackenzie in Edinburgh.
Since the early 80s, the findings have failed to keep pace with the rate of world oil consumption, which last year amounted to 31,000 million barrels of oil. Rather, companies have managed to increase production by finding new ways to extract more oil from existing fields, or produce the oil through unconventional sources such as Canadian tar sands or heavy oil in Venezuela.
Estimates of reserves typically increase over the life of a reservoir, which can often be productive for several decades, as businesses are finding new ways to extract more oil from the earth.
The record of this industry has improved in recent years, thanks to high prices. According to Energy Research Associates, oil companies have found more oil than it produced over the past two years through a combination of exploration and expansion of deposits.
«The appetite for opening new frontiers, when prices were low in the 90s, was very small,» he said Paolo Scaroni, head of Eni, Italy’s oil giant. «Currently, the greatest discovery of all is the technology.»
One of the major findings of this year was done by a small producer Heritage Oil, the Miran West One field in the Kurdistan region of northern Iraq. He found nearly 2,000 million barrels of oil and plans to drill a second site well before the end of the year. While the central government of Iraq has had complications to attract investors to develop its huge fields, local authorities of Kurdistan have been successfully courting foreign producers.
In the meantime, in the Gulf of Mexico, BP’s discovery shows that the area remains one of the most promising oil regions of the United States. BP has estimated the Tiber field has 4,000 to 6,000 million barrels of oil and gas, which would be enough in theory to cover domestic demand for over a year.
«In 30 years in this business, the Gulf of Mexico has been ranked as the Dead Sea countless times,» said Bobby Ryan, vice president of exploration at Chevron. «And it is reviving.»
Brazil will be seventh world producer
BRASILIA | In recent years Brazil has gone from being a net oil importer to a major power exporter, thanks to the discovery of ultra-deep water fields have estimated between 30 billion and 50 billion barrels.
As stated before the Senate Energy and Mines Minister Edison Lobao, Brazil will be the seventh or eighth largest producer of oil if these millions reservations are confirmed.
To support this statement, the minister explained that only four oil field reserves are estimated at 16,000 million barrels, enough to ensure the country’s consumption for 40 years. The estimated figures now relate only «30% of the areas (which began to be explored). No one can say what will come of the remaining 70%,» he added.
Lobao went to the Senate to explain the new rules from the Government to govern the exploitation of oil. The chief argued that the giant Petrobras, controlled by the State, has 30% of production and is the only operator of all contracts for tender.