Eskil Jersing
Oil & Gas Senior Executive, Business Development Advisory

About 10 years ago when Brent was $111 average for the year (vs $91 today with geopolitical/supply risks likely forcing it upwards in the near term), I was asked to give an in-house lunch and learn talk on Exploration and NV learnings from Peer companies and Majors.

It’s interesting to see what has changed and what has stayed the same over the last decade…

Regardless of the rebound in activity the ongoing (last?) upcycle provides, what is unquestionable is that even by relatively conservative demand assumptions this next decade, Upstream will still need to spend ca.$400Bn/pa (per Woodmac) over the next decade for an equable transition.  

Consolidation makes sense for the Producers (some 2,300 Companies with <15boepd and 300+ producing >60kboepd) this next decade; but what of Exploration, only the best (ILX, short-cycle, low carbon, advantaged jurisdictions, leverage on control/pace, lower costs-higher margins etc) acreage will secure capital, with remaining non producers having to fight tooth and nail to stay kicking on..

Back in 2012 ca. 10-15% of Upstream budgets used to be allocated as Exploration capital, not so sure that in today’s environment that Companies will have/be able to allocate that kind of discretionary quantum…and where will it go..the balance between defensive/opportunistic and proactive/game-chasing will be fascinating to watch.

..the future rewards those who press onwards..

KeyFacts Energy: Commentary