Oil Firms Seen Cutting Exploration Spending

"You will probably see more activity at the asset level more than at the corporate level ... More joint ventures, swapping assets, buying and selling of assets,' said Jeremy Bentham, Shell's vice-president for business environment.

Insiders believe the cuts may not be reversed until capital tied up in projects like Chevron's $54 billion Gorgon LNG or Conoco's $25 billion Australia Pacific LNG start producing cash flow and return.

"There will be less investor pressure, then companies can get activity back up, so this may be a pause of a couple of years where companies scale back," Brinker said.


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Les Wood  |  February 22, 2014
One of the impediments to profitability and cash flow for exploration is the tendency of large companies to throw people at projects and most of those people are not related to production improvement but more towards social and environmental engineering. Here the tail is wagging the dog. This loss of fundamental focus in exploration and production causes a loss in shareholder value and the ability to explore and produce. In my opinion, the Grogan Project is a good example of non-focused costs running rampant.

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