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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: Big Dog who wrote (32110)11/26/1998 10:09:00 AM
From: marc chatman  Read Replies (2) of 95453
 
This question is mainly for the thread's industry insiders, including E&P insiders (although I'm happy to get a view from anyone):

What is the impact of oil industry consolidation (e.g., Exxon-Mobil, BP-Amoco, etc.) on spending for exploration and drilling?

On the one hand, I would guess fewer players means less drilling. And a few, very large players may have more leverage in negotiating lower drilling and service fees than would a greater number of medium-sized oil companies.

On the other, strengthening the oil companies by increasing their economies of scale and eliminating redundant costs could increase cash flow, so more resources could be devoted to exploration.

I suppose there is at least one other choice, which would suggest no change since they will maintain whatever drilling activity is necessary to meet demand -- but as we've seen, that is over the very long term.

Thanks in advance for any opinions.
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