The last three years
has been the worst
in seventy years for
new conventional
oil discoveries.
IHS Markit reports
conventional oil
discoveries plunged
to a seven-decade low
and “a significant rebound
is not expected.”
Conventional exploration
had been trending down
after the 2008 global
financial crisis, thanks to
the rise of horizontal drilling
and hydraulic fracturing
in several U.S. shale basins.
The collapse
of oil prices
in 2014 hurt
conventional
exploration,
and the resulting
new discoveries.
WTI bottomed
in early 2016
at below $30
per barrel.
Investors began to view
short-cycle shale drilling
as inherently less risky.
So the U.S. had a steep rise
in shale output, and a
sharp decline in conventional
discoveries.
US independents reduced
international exploration
to invest in shale in the U.S.
Chevron and ExxonMobil
are among the largest
producers in the U.S.
Permian basin.
The number of wells
drilled in unproven areas
in deepwater dropped from
161 in 2014, to just 68 in 2018.
The problems
in U.S. shale --
high debt levels,
and low profits
-- might mean
more offshore
drilling in the future.