Big Oil hits brakes in search of new fossil fuels

LONDON: Major oil and gas companies severely delayed their search for new fossil fuel facilities last year, data show, as lower energy prices prompted a coronavirus crisis to drive spending cuts.

The purchase of new onshore and offshore exploration licenses for the top five energy giants in the West fell to its lowest level in at least five years, data from Oslo-based advisory group Rystad Energy showed.

The number of survey licensing rounds fell last year as a result of the epilepsy while companies including Exxon Mobil, Royal Dutch Shell and France’s Total also reduced consumption, Rystad Energy analyst Palzor Shenga said.

“Getting an additional lease comes with a cost and requires some work commitments to be met. For that reason, companies would not want to collect extra acres in the their non-core areas of work, ”Shenga said.

(GRAPHIC: Slow review – https://graphics.reuters.com/OIL-EXPLORATION/azgpolnldvd/index.html)

Of the five companies, BP saw the biggest drop in new acreage construction in 2020. Bernard Looney, who became CEO of BP in February, outlined a strategy to reduce oil production by 40per hundred or 1 million barrels every day by 2030. MPs have quickly repurposed the investigation team in recent months.

Exxon, the largest U.S. power company, acquired the largest acreage in 2020 in the group, with 63per percent in three blocks in Angola, according to Rystad Energy.

Second place with two big blocks was found in Angola and Oman.

Getting a survey acre means oil and gas companies can find it. If new facilities are found in sufficient numbers, companies need to decide whether to develop them, a costly process that will take years.

As a result, the decline in survey activity could lead to a supply gap in the second half of the decade, analysts said.

(Graphic: Spending oil majors – https://graphics.reuters.com/OILMAJORS-CAPEX/jznvnqwzdpl/index.html)

(Reporting by Ron Bousso; Editing by Alexander Smith)