NEW YORK May 19 High oil and gas prices have
spurred more exploration, but lack of access to resources,
rising costs and a shortage of new workers are slowing oil
companies' output growth, the head of oilfield services giant
Schlumberger Ltd (SLB.N) said on Monday.
Exploration spending by the largest oil companies has
turned higher in the past couple of years, reversing the trend
of spending declines over the previous decade, Schlumberger CEO
Andrew Gould told an energy conference, according to the text
of his speech provided by the company.
Less than 25 percent of worldwide reserves are open to
private investment, he said, because many states are turning
over their fields to government-controlled oil companies.
"This does not mean that (production) gains will not occur,
but it does mean that they will take longer than if access had
been more open," Gould said.
Schlumberger, the world's largest oilfield services
company, and its peers have posted sharp revenue and earnings
growth in recent years as energy companies increased spending,
and Gould has predicted that trend will remain in place into
the next decade.
Oil prices in the United States have jumped to record
levels near $128 a barrel in recent days, and natural gas has
surged to $11 per million British thermal unit.
For the energy producers, rising costs for raw materials
such as steel have also help contributed to a 120 percent
increase in exploration and production spending between 2004
and 2007, while the number of new wells drilled has risen by
only 52 percent, he said.
High energy prices have also prompted governments around
the globe to hike taxes and change investment terms to gain a
greater share of producers' profits.
But added to the rising materials cost and the riskier
nature of many new fields, "there is a real danger that this
will cause underinvestment and simply exacerbate the problems,"
The aging energy workforce also presents a problem for the
industry, which must attract a new generation of engineers,
geologists and other workers to keep the industry operating.
Much of that need will be to staff offshore rigs, which are
becoming more crucial for energy production. Nearly 160 new
rigs are under construction around the world, requiring about
30,000 new workers, he said.
(Reporting by Matt Daily, editing by Leslie Gevirtz)