Some of the largest oil and gas companies in the world continued to venture into the less conventional regions of the world this week in their quest to locate their next megaproject. Fresh from their negotiation of exploration blocks in Kurdistan, ExxonMobil’s next target materialised via a farm-in of Block LB-13 in the ultra deep waters offshore Liberia from Canadian Overseas Petroleum. Although the $91 million acquisition is minor compared to the more headline grabbing acquisitions from ExxonMobil such as the $41 billion acquisition of XTO in 2009, it signifies an increasing willingness from big oil companies to move into riskier areas both geologically and politically.
The US home of ExxonMobil has always formed a major focus for the company, whether it be as a source of politically stable reserve or as an end customer as the world’s largest consumer of oil and gas resources. The need to further diversify has been made ever more apparent however by the fast pace of foreign economic development and a price disparity brought about by the runaway success of shale resources. Historically the United States based crude benchmark of WTI has always traded at a premium to the UK North Sea based Brent benchmark, primarily due to its lighter gravity. Recently though, the WTI has been trading just short of $100, which is $10 shy of the Brent crude price. Even in Ghana, Kosmos Energy, a previous target of ExxonMobil in 2010, reported realisations of $115 during Q3 2011.
In another frontier region, Statoil farmed into Block 47 in the deepwater offshore area of Surinam from Tullow Oil. The region received a significant credibility boost when the Tullow operated Zaedyus well discovered 72 metres of net oil pay in the neighbouring French Guiana in September 2011 and put the region firmly onto the radar of Tullow’s peers. Statoil also added to their Canadian operations this week, targeting the little developed offshore Newfoundland & Labrador area. Statoil will be joined in the asset by Chevron and Repsol, with the partnership committing to spend C$374 million in work commitments.
Kodiak Oil & Gas Corp continued its aggressive acquisition programme this week with a $590 million purchase of Bakken acreage in the Williston basin. There were already liquidity concerns from the market concerning the company in late September, when Kodiak agreed to purchase Bakken acreage for a then company record of $245 million. Even though the…
