oilers on the move, page-36

Exxon Lowers Bar, Buys Assets Once Seen Unattractive

BP Plc and Total SA are investing in assets that previously werent worth their time or money after oil-rich nations reduced access to reserves and exploration drilling faltered.

Efforts to find new sources of crude and natural gas are failing more often, with San Ramon, California-based Chevron Corp.s exploration failure rate jumping to 35 percent last year from 10 percent in 2008.

Their No. 1 problem is reserves replacement, said Nansen Saleri, chief executive officer at Quantum Reservoir Impact in Houston and former reservoir-management chief at Saudi Arabias state oil company. Thats the elephant in the room, so thats what they have to address.

To compensate, major producers are investing in projects they once eschewed, including geologically complex oil and gas fields, called unconventional by the industry to distinguish them from the easy-to-get oil and gas of earlier years.

More Acquisitions

Integrated oil companies announced almost $100 billion in acquisitions in the past year, up 53 percent from the preceding 12 months, according to data compiled by Bloomberg.

Exxon forecasts faster demand growth for gas than for other major energy sources because supplies are ample and gas has lower emissions when burned than oil or coal, Jeffers said.

-----------------------------------------------------

Reserves falling, less new discoveries, faster demand for growth of gas forecast. Acquisitions speeding up. Patience boys, our time will be near.

Looking forward

LM