Really, it’s not like anyone is finding new large oil deposits out in exploration land. Indeed, a whole lot of looking is leading to not very much finding in the exploration patch.


The big Oil companies are taking oil out of the ground. But generally, they are not replacing their reserves through reserve growth or resource expansion. To the extent that the oil companies are expanding reserves in the short term, it’s by searching further out in the ocean or further north in the ANWR And that raises the cost structure for production.

It’s a rare oil company that replaces its annual output with new reserves.