Oil exploration remains viable amid unstable crude oil prices
Oil firms are still in for a bumpy ride as current crude oil prices have been up, and then down again for quite some time now. However, despite an apparent lack of direction in crude oil prices, an oil market specialist commented that these firms are still in good financial standing and that there remains a host of lucrative energy-related businesses waiting to be explored.
Last June, crude was selling at a dismal $80 a barrel, a 20 percent drop from February when the commodity was selling at record high prices.
One oil firm’s stock specialist, Christyan Malek, confirmed that oil companies are still going strong, although they are also challenged to explore new areas for more oil resources.
He also stressed that oil firms are affected by high costs of production. As a result, they have to seek new ways to curb expenditures without neglecting programs for discovering new oil regions.
In terms of asset strength, he has cited oil giant Shell as one energy company with high investment value. On the other hand, he has also mentioned AMEC and Saipem for their production efficiencies and programs for coping with high inflation.
Meanwhile, Providence Resource Chief Executive Officer opined that, despite the prevailing low crude oil prices, oil exploration and development won’t suffer a slowdown. Providence’s crude resources have almost tripled after striking a new discovery in the waters of the North Celtic Sea just this year.
Anthony O’Reilly, one of the founders of Providence, disclosed that its newly discovered oil reserve has flow rates of almost twofold versus acceptable levels.
O’ Reilly continued by saying that, “No company ever makes an investment decision on current crude oil prices of $100-plus oil. A price tag of $50 – $60 or above is where most people in the industry would be.”
Further, Ireland’s offshore oil sector would benefit from more investment in oil exploration. Production should likewise be stepped up. But so far many analysts are quite happy with the North Celtic returns and look forward to more discoveries and opportunities like it.
Investors are encouraged to become more aware of investment prospects offered by the energy sector and to consider clinch joint venture arrangements with Ireland’s various energy sectors.
Meanwhile, he denies rumors of possible tax increase in the country as government attempts to recover from the debilitating market crash which hit the country about three years ago. He disclosed that a minority group within the Irish parliament were actually the ones pushing for additional taxes.
He concluded by mentioning that the way to a more vibrant oil sector is to lure more investments that would help spur and sustain continuous oil exploration and development.