Norwegian oil and gas company Aker BP is switching emphasis from M&A towards exp...
OSLO - Norwegian oil and gas company Aker BP is switching emphasis from M&A towards exploration, taking a potentially riskier path to increase its resources after years when it has relied on acquisitions to add the bulk of its new barrels.
“Now, when the drilling and the data acquisition cost have come down, and the acquisition costs of the equivalent contingent resources have gone up, it makes sense .” Aker BP’s own exploration efforts during that period were far smaller: the firm added 148 million boe from discoveries - 83 million in 2016, 10 million in 2017 and 55 million last year.The company, controlled by Norwegian billionaire Kjell Inge Roekke and 30 percent owned by BP, said in January it was hiking its exploration budget by 40 percent year-on-year to a record $500 million in 2019 and planned to drill 15 exploration wells. It aims to find around 100 million boe net in 2019-20.
“We have drilled too many dry wells,” Aker BP’s exploration chief Evy Gloerstad-Clark told Reuters. “If we want to get to the top we need to get a better exploration processes in place.” “With the upturn in the cycle, investors are more focusing on exploration and reserve replacement than a few years ago, when all the focus was on return on capital and dividends.”
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