Bud's Offshore Energy (BOE)

Why U.S. Oil Companies Aren’t Riding to Europe’s Rescue

This article is primarily about Texas shale oil production. Offshore production, particularly in deepwater areas, is much more capital intensive, requires longer lead times, is exclusively on government leases, and is highly regulated by multiple agencies. These factors weigh against quick responses to market conditions. A Bloomberg article about Shell’s Vito project provides a good offshore perspective.

Another important factor in the offshore sector is that the major oil and gas producers seem to be going through an identity crisis, torn between what they are and what they (aided by some loud and powerful voices) think they should be. The future of these companies is dependent on how they navigate through all of this. The need for oil and gas is clearly not going away (see EIA projection below). Who will provide the supply and where will it be produced?