LONDON (Reuters) – Major oil and gas companies drastically curb search for new fossil fuel resources last year, as energy prices due to coronavirus crisis led to cuts of expenditure.
Acquisitions of new land and sea exploration licenses for the top five Western energy giants fell to a five-year low, according to data from Oslo-based consulting firm Rystad Energy.
The number of rounds of exploration licenses fell last year due to the epidemic, while companies such as Exxon Mobil, Royal Dutch Shell and France’s Total also cut spending, said Palzor Shenga, an analyst at Rystad Energy .
“The acquisition of additional leases involves a cost and requires that some work commitments be met. Therefore, companies would not want to accumulate additional areas in their areas of non-core operations, ”said Shenga.
(GRAPHIC: slow scan – here)
Of the five companies, BP experienced by far the largest drop in the acquisition of new surfaces in 2020. Bernard Looney, who became CEO of BP in February, outlined a strategy to reduce oil production in 40% or 1 million barrels per day by 2030. BP has rapidly reduced its exploration equipment in recent months.
Exxon, the largest US energy company, acquired the largest area in 2020 the group, with 63% in three blocks in Angola, according to Rystad Energy.
Total came in second with two major blocks acquired in Angola and Oman.
Acquiring an exploration surface means companies can look for oil and gas. If new resources are discovered in sufficient quantities, companies must decide whether to develop them, a costly process that can take years.
As a result, the fall in exploration activity could lead to a supply gap during the second half of the decade, analysts say.
(Chart: Expenditure of large oil companies – here)
Reports by Ron Bousso; Edited by Alexander Smith