Oil Exploration Shifting to More Developed Countries for More Predictable Returns

The Wall Street Journal reported today that big companies are shifting towards more developed nations for their oil and gas exploration projects. For companies like Shell (NYSE:RDS.A) and Exxon Mobil (NYSE:XOM), higher costs and tighter regulations are balanced by the benefit of political stability, according to the Journal.

As quoted in the publication:

For decades, Shell invested heavily in finding and pumping oil in Nigeria’s Niger Delta. But in early 2006, militants began attacking Shell facilities, kidnapping workers and blowing up pipelines. Thieves drilled holes in pipes to siphon oil. Shell says it lost money there in some recent quarters. So companies like Shell are shifting toward more-predictable lands. In 2013, the world’s biggest non-state-controlled oil companies—Exxon, Shell and Chevron Corp.CVX -0.28% —spent 66% of their exploration-and-production budgets in OECD countries, estimates Sanford C. Bernstein Ltd., up from 49% in 2003.

Click here to read the full Wall Street Journal article.