Oil Majors Fail To Find Reserves To Counter Falling Output

Across the industry, this could mean the loss of hundreds of thousands of barrels of oil production each day.

Some investors and analysts say companies could yet use the downturn to help build long-term reserves and production.

Paul Mumford, fund manager with Cavendish Asset Management, said lower oil prices and a drop in drilling activity was leading to downward pressure on the prices firms which sell construction and drilling services to oil majors charge. This could encourage some companies to drill and build more, he said.

And Charles Whall, fund manager with Investec, said stronger companies should consider replacing reserves through acquisitions.

Morgan Stanley's Rats added: "Sometimes, the best projects are done at the bottom of the cycle."

(Additional reporting by Dmitry Zhdannikov; Editing by Pravin Char)


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