f The Allocation of Exploration Dollars in a High Oil Price Environment

The high oil prices of the late 70’s resulted in exploration investment trends in the 80’s that destroyed value for the industry. The oil price is rising again and many are suggesting that the industry may be operating in an environment where oil is priced in excess of $ 30 a barrel for a significant period of time. Will we learn from the mistakes of the past? The complex question of the allocation of exploration dollars across an international portfolio involves the convolution of many factors; economics, company strategy and the ability to secure quality acreage, to name but a few. By simplifying the question to two geographic/geologic provinces, namely the deepwater Gulf of Mexico and South East Asia, an analysis of the key decision criteria can be conducted, these can then be compared and contrasted while referencing against a prognosed high oil price. Does the exploration investment climate favour the United States over SE Asia? If so why, and will history repeat itself?