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IPAA Releases New Survey on the International Activity of America’s Independent Oil and Natural Gas Producers

The Independent Petroleum Association of America (IPAA) has released a new survey on the international activity of America’s independent oil and natural gas producers.  IPAA’s Vice President of Economics and International Affairs Fred Lawrence presented the results on behalf of the IPAA International Committee on February 6, 2008 at the NAPE® International Forum in Houston, TX.

"This data will help guide future efforts of the International Committee" said Lawrence. "The survey provides valuable insight into the rationale behind American independents' overseas activities such as why they venture abroad versus staying domestic. Despite geopolitical stresses and increased competition from National Oil Companies (NOCs), the survey finds that opportunities remain for independents on the international front. The survey helps define the international niche of the independent and provides some key details for companies interested in exploring this new horizon.  The International Committee would like to thank the members who participated in the survey."

The survey, taken in 2005, includes the responses of 224 IPAA member companies, 21 percent of which were involved in international ventures.  The results of this survey and other historical surveys show that oil price factors in largely in the popularity of international ventures for independents.  South America was the most popular region for international involvement with 47.8 percent of respondents considering the continent for future endeavors.

Those members involved in international operations said that typically 20 percent of total company budget is applied to these ventures, the median dollar amount of that investment at around $20 million.

“What we have learned over the past decade is that the international arena is an area where U.S. independents can risk what is ultimately a small percentage of their exploration budgets for potentially large payoffs,” said Lawrence.  “The survey shows the decision to become involved internationally is steered heavily by geographic proximity and political risk.”

The survey provides a reminder that the international playing field is constantly evolving for independents.  “Increased government take and increasing competition for opportunities are making conditions much more challenging, but independents can use their own intrinsic advantages to maximize benefits that can be reaped on promising prospects far away from home, ” said Lawrence.
 
The IPAA International Committee hopes to conduct this survey every two years in an effort to better follow and understand the international behavior of the independent oil and gas producer.

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IPAA is the national trade association representing oil and natural gas producers that drill 90 percent of the nation's oil and natural gas wells. These companies account for 68 percent of America's oil production and 82 percent of its natural gas production.