By Paul Marriott
SYDNEY (Reuters) - Roc Oil's (ROC.AX: Quote, Profile, Research, Stock Buzz) boss John Doran says small cap oil explorers are increasingly stretching limited resources across geographies and tougher projects as high oil prices boost costs as well as rewards.
Within 10 years, Welshman Doran has taken the company he founded close to a market capitalization of A$1 billion ($750 million) with operating interests in projects from Africa to Europe, from a new discovery in China to back home in Australia.
"The one company, one basin, narrow focus has gone," he told Reuters in an interview as part of the Reuters Global Energy Summit.
"Unless you have a nice piece of Saudi Arabia you limit growth opportunities if you concentrate on one area. Distance is dead, it's the least limiting factor nowadays."
In Middle Eastern literature the Roc is a bird which led Sinbad to great natural resources in the Valley of the Diamonds. For a small player, Roc has taken the unusual step of leading many of its projects, seeing clear advantages in operator status.
"It's unashamedly and absolutely our strategy," said Doran. "Operatorship is a currency. Unlike many small companies we've done hard yards to acquire the skills to drill in deep water, but then we're prepared to operate fields that are too small for the majors. You could say we're operating in the twilight zone."
2006 has been a good year for Roc, with the first oil from its Cliff Head field off Western Australia and Chinguetti off West African Mauritania in which it has a minority stake. Doran is glad to lock into high oil prices but feels other constraints.
"Pressure on equipment, people and costs are the flipside of high oil prices," he said. "Then add a fourth problem of renewed nationalism in terms of governments owning their oil properties -- not something that is limited to developing countries". Continued...
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