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23 Trillion Reasons to Invest in Energy Exploration and Production

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The International Energy Agency’s latest report suggests the world will need to invest $48 trillion by 2035 to meet the world’s energy needs. That will keep companies like ConocoPhillips, Anadarko Petroleum and Chevron very busy in the coming decades.

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23 Trillion Reasons to Invest in Energy Exploration and Production

  1. 1. 23 Trillion Reasons to Invest in Energy Exploration and Production Photo credit: ConocoPhillips
  2. 2. According to the International Energy Agency the world needs to invest $23 trillion by 2035 on energy supplies.
  3. 3. Nearly $17.5 trillion will need to be spent just on exploration and production activities, with the rest spent on transportation and processing.
  4. 4. This investment will offset declining base production as well as provide growth to supply the energy needs of emerging nations.
  5. 5. It’s a major opportunity for the energy industry to profit as it fuels the world’s growing energy needs.
  6. 6. Three exploration and production companies in particular stand out as being the best investment ideas to profit from this global trend.
  7. 7. ConocoPhillips (NSYE: COP) Current plan is to grow production and margins by 3-5% annually through 2017. Photo credit: ConocoPhillips
  8. 8. ConocoPhillips • Spending $16 billion per year to maintain and grow production as well as explore for future sources of energy. • Focus is on growing production that yields margins of more than $30 per barrel of oil equivalent. • Company also spending $2.1 billion per year to explore and appraise its vast portfolio of opportunities in order to deliver production growth beyond 2017.
  9. 9. ConocoPhillips • Currently spending $16 billion per year to grow production and explore for future sources of energy. • Focus is on growing production that yields margins of more than $30 per barrels of oil equivalent. • Company has a vast portfolio of opportunities to deliver production over the next few decades.
  10. 10. ConocoPhillips Three areas important to future growth: 1. The Deepwater Gulf of Mexico – Four recent discoveries being appraised and more than a million acres to explore. 2. Angola – Looks to be analogous to Brazil’s Santos and Campos Basins. 3. Canada – Large position in the oil sands as well as the emerging Duvernay and Montney Shale plays.
  11. 11. Anadarko Petroleum (NSYE: APC) Current plan is to grow production by 5-7% annually through 2020. Photo credit: Anadarko Petroleum
  12. 12. Anadarko Petroleum • Spending more than $8 billion per year to maintain and grow production as well as explore for future sources of energy. • Industry leading 70% success rate on deepwater exploration and appraisal wells. • Company also spending $800 million per year to explore and appraise its portfolio of resource opportunities.
  13. 13. Anadarko Petroleum • Currently spending more than $8 billion per year to grow production and explore for future sources of energy. • Industry leading 70% success rate on deepwater exploration and appraisal wells. • Company spending $800 million per year to explore and appraise its portfolio of resource opportunities.
  14. 14. Anadarko Petroleum Three areas important to future growth: 1. The Deepwater Gulf of Mexico – several large projects in development as well as a number of significant recent developments. 2. Mozambique– Massive natural gas discovery is turning into a leading LNG export opportunity. 3. Ghana– Currently developing its second major oil discovery as well as appraising additional fields.
  15. 15. Chevron (NSYE: CVX) Current plan is to grow production by 20% overall from 2013 to 2017. Photo credit: Flickr/Robert Stupka
  16. 16. Chevron • Discovered or added 10.3 billion barrels of oil equivalent resources over the past decade. • Leads its big oil peer group with a 120% exploration resource replacement over the past decade. • Strong 56% success rate on exploration wells. • Company spending about $3.6 billion per year to explore for energy around the world.
  17. 17. Chevron • Discovered or added 10.3 billion barrels of oil equivalent resources over the past decade. • Strong 56% success rate on exploration wells. • Company spending $800 million per year to explore and appraise its portfolio of resource opportunities.
  18. 18. Chevron Three areas important to future growth: 1. The Deepwater Gulf of Mexico – several large projects in development as well as a number of significant recent developments. 2. Australia– Gorgon and Wheatstone LNG projects starting up soon with numerous expansion opportunities. 3. Canada– Liard and Horn River Basin natural gas fields will fuel the Kitimat LNG export project.
  19. 19. Investor takeaway: All three companies have energy production growth through the end of the decade well in hand. Beyond that each has secured visible growth opportunities to profit from meeting the world’s need for energy. Photo credit: Anadarko Petroleum
  20. 20. This is becoming OPEC’s Worst Nightmare

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