Originally Posted by
212man
Love it - the 17 year old telling the senior manager of an oil and gas company, who has been in the business in various roles for more than twice as long as you have been on earth, how his business works! Go for it.....
As was explained, the 'rigs' you are referencing are used for exploration and have nothing to do with production. However, when they are used to explore new fields the success rates are eye wateringly low and so any exploration campaign represents a huge financial gamble. Even when successful the time to production is measured in years and, for very extreme parts of the world, even decades. Take Prelude as an example.
Cutting exploration during a low oil price environment is a quick and easy way to cut overall costs, but it cannot be sustained as reserves have to be replenished at some point. In fact, as was pointed out, the low rig costs actually present an opportunity to go exploring basins that previously were considered too expensive and I know, for a fact, that some companies are discussing basins that 18 months ago would have been dismissed out of hand.
The other side of the coin is that for large integrated energy companies, this low price environment means a boost to their downstream businesses as the cost of their raw product is proportionately lower than any reductions in the price of the products they sell. In many cases this side of the business is 'propping up' the company in this period.
So, no, as TM said; "it's not that simple"!
So I just went to control panel and clicked don't show my age now there won't be a problem. I get the feeling your teen years may have been interesting.