Dec 18, 2018

Oil companies are making more big finds

An oil pumpjack in Germany operated by ExxonMobil. Photo: Adam Berry/For The Washington Post via Getty Images.

The oil-and-gas industry has halted years of declining investments in exploration and it's paying off in the form of big conventional finds.

Where it stands: The consultancy Rystad Energy said in a note Monday that discoveries this year will total an estimated 9.4 billion barrels of oil-equivalent. It's the biggest year for exploration since 2015, they added. The total is dominated by offshore finds, including Exxon's string of big oil exploration hits off Guyana's coast.

The big picture: Industry spending on oil-and-gas exploration began plunging nearly a half-decade ago, dropping 61% from 2014 levels, but the picture is changing again. Rystad analyst Palzor Shenga said in a statement...

“Global exploration activity and discoveries have halted their year-after-year decline and look set to rise in the next year ... This as an exciting recovery which runs contrary to a decline in global exploration spending from 2014 to 2017."

By the numbers: Analysis from the consultancy Wood Mackenzie — shared with Reuters and confirmed by Axios — shows that upstream spending is slated to grow to $425 billion next year.

  • That's $25 billion above 2016–2017 levels but still far below the $770 billion the industry spent finding new supplies in 2014.
  • "More careful allocation of capital since 2017 has returned exploration to profitability, and 2019 looks set to be another promising year. Hotspots will include Guyana, Brazil, Mexico, US Gulf of Mexico, Cyprus, South Africa and the Barents Sea in Norway," WoodMac said in a note.
  • In addition, WoodMac also sees an increase in final investment decisions on large production projects, including big South American offshore fields, rising next year.

The intrigue: It's not clear whether the industry will bring enough new crude supplies online in coming years to avoid problems down the road as demand grows and mature fields decline.

  • There's a (disputed) view among some analysts that despite the U.S. shale surge, a global supply crunch could surface in the 2020s absent stronger investment in conventional exploration and megaproject approvals.

What they're saying: The IEA's big World Energy Outlook in November warned: "The average level of new conventional crude oil project approvals over the last three years is only half the amount necessary to balance the market out to 2025."

  • IEA fears that the rise in U.S. shale production won't be enough to close the potential gap.

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World coronavirus updates: World Bank warns economic pain unavoidable

Data: The Center for Systems Science and Engineering at Johns Hopkins, the CDC, and China's Health Ministry. Note: China numbers are for the mainland only and U.S. numbers include repatriated citizens and confirmed plus presumptive cases from the CDC

The novel coronavirus has caused a "global shock" and significant economic pain "seems unavoidable in all countries," the World Bank said in an economic update for
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The big picture: COVID-19 cases surged past 786,000 and the death toll exceeded 37,800 early Tuesday, per Johns Hopkins data. Italy reported more than 11,500 total deaths.

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Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 2 a.m. ET: 786,228 — Total deaths: 37,820 — Total recoveries: 166,041.
  2. U.S.: Leads the world in confirmed cases. Total confirmed cases as of 2 a.m. ET: 164,603 — Total deaths: 3,170— Total recoveries: 5,896.
  3. Federal government latest: The White House will extend its social distancing guidelines until April 30.
  4. State updates: Rural-state governors say testing is still inadequate, contradicting Trump — Virginia, Maryland and D.C. issue stay-at-home orders to residents, joining 28 other states.
  5. Business latest: Ford and General Electric aim to make 50,000 ventilators in 100 days.
  6. In photos: Navy hospital ship arrives in Manhattan.
  7. What should I do? Answers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk.
  8. Other resources: CDC on how to avoid the virus, what to do if you get it.

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U.S. coronavirus updates: Death toll tops 3,000

Data: The Center for Systems Science and Engineering at Johns Hopkins; Map: Andrew Witherspoon/Axios

The U.S. death toll from the novel coronavirus has now surpassed 3,000, per Johns Hopkins data.

The state of play: The U.S. had by Monday night recorded more than 163,000 positive cases — more than any other country in the world, per Johns Hopkins. The COVID-19 death toll stood at 3,008. The number of recoveries had risen to more than 5,800.

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