Oil Price Drop Pushes Exploration To Known Areas:Chevron Executive
August 07 2009 - 2:27PM
Dow Jones News
Lower oil prices are driving oil-exploration efforts away from
risky areas to well-known basins, a Chevron Corp. (CVX) executive
said Friday.
The statement comes as the U.S. oil major unveiled an
oil-and-gas find it deemed "significant" after drilling a basin
located near Angola's Cabinda enclave. But the discovery comes amid
talk in the oil industry that companies are cutting on exploration,
sparking fears of an energy crunch.
Asked if the discovery ran counter to this trend, Ali Moshiri,
president of Chevron Africa & Latin America Exploration &
Production, said, "The exploration activity is ... moving more
inward, where you usually already have found oil.
"It's more cost-effective to explore in your core area, where
you have a good understanding of drilling, of geology," Moshiri
said in an interview with Dow Jones.
"Where there is going to be more impact by lower oil prices is
in frontier areas," he added.
"If you go in frontier areas, there is more risk" so people tend
to pull out at times of lower or volatile prices, he said.
The discovery announced Friday was made in Block 0, which
already produced an average of 344,000 barrels of liquids per day
as of 2008.
The find showed a rate of 11.6 million cubic feet of natural gas
and 2,550 barrels of liquid hydrocarbons a day.
Moshiri said the liquid hydrocarbons are light oil, a quality of
crude highly prized by traders.
Chevron has a 39% stake in Block 0, while Angolan national oil
company Sonangol EP has a 41% interest. Total SA (TOT) and Eni SpA
(E) each hold 10%.
-By Benoit Faucon, Dow Jones Newswires; 44-77-601-777-36