Big Oil ignoring untapped reserves says analyst

Looks like Democrats in Congress aren’t the only one to think Big Oil should “us it or lose it” with regards to the millions of acres of federal land that is sitting idle. It may not be convenient, but an oil spill is hardly convenient either.

The oil industry is correct about not hoarding oil, said Oppenheimer analyst Fadel Gheit. With prices at $135 dollars a barrel, everyone is trying to pump as much as they can, he said.

But fearing oil prices will eventually fall, the industry is leery about making too many investments in the fields it has – many of which are in deepwater areas that can be pricey to develop.

Instead, they’re holding out, hoping the government will open areas closer to shore that would be cheaper to work on.

Gheit hasn’t seen the legislation proposed by Markey and others, but he thinks the government should revise the leasing process to encourage more drilling on existing areas before it puts more acres up for bid.

“Government agencies should hold their feet to the fire,” he said. And oil companies “should finish what’s on their plate before they do back in line.”

An American in Paris, France. BA in History & Political Science from Ohio State. Provided consulting services to US software startups, launching new business overseas that have both IPO’d and sold to well-known global software companies. Currently launching a new cloud-based startup. Full bio here.

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