Chevron Exec Says Oil Price Drop Pushes Exploration to Known Areas
LONDON (Dow Jones Newswires), Aug. 7, 2009
Lower oil prices are driving oil-exploration efforts away from risky areas to well-known basins, a Chevron Corp. 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 and Eni SpA each hold 10%.
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