Oil exploration activity higher this year: French Institute
Investment in global oil exploration and production could increase 5-10 percent this year, after a fall of 13 percent in 2009, pushed by increased prices, a French industry group said on Tuesday.
"There is a very strong correlation between investment and the price of oil," said Nathalie Alazard-Toux, head of economics for the French Petroleum Institute.
Oil prices averaged 60 dollars per barrel in 2009, after a sharp recovery from low levels of just above 30 dollars, and increased to 78 dollars so far this year, according to FPI figures.
New exploration activity has risen sharply, gaining 26 percent for onshore work, of which nearly half was in North America.
Most of the work being done in North America is on 'shale gas,' a new bonanza which has seen US gas output soar in recent years.
Offshore exploration has gained only seven percent, reflecting a sharp downturn in North America following the Gulf of Mexico BP well blowout earlier this year and subsequent moratorium on deep-water work.
On the refinery side, investment is down six percent so far this year, the FPI said.
Refinery capacity remains some six million barrels per day above demand, with most of the overcapacity found in Europe.
© 2010 AFP