• Frontier effect
• The environment
• Reserves replacement

Reserves replacement

Exploration is becoming more challenging because the easy-to-find fields have been discovered.

 

Discounting reserves replaced by acquisition, the large oil companies found only 87% of the oil and gas that they produced.

 

In fact, if replacement through more efficient extraction from existing reservoirs is excluded, Wood Mackenzie estimates the reserve-replacement ratio (RRR) as being below 50%.

 

Numbers like these have prompted fears that the world’s oil production will soon peak and then decline. This does not mean that the large oil companies will run out of oil, but they will have to look for it in more challenging frontier areas.

 

Innovative technologies that improve exploration efficiency, such as seabed logging, are playing an important role in finding the new fields that companies need to improve their RRRs.