Petroleum industry executives think Texas is a good place to do business. As a matter of fact, they think it is the best place in the world for investment in oil-and-gas exploration and production, according to a recent survey.
The Fraser Institute recently issued its 11th annual survey of petroleum industry executives and managers regarding barriers to investment in oil-and-gas exploration and production facilities in various jurisdictions around the globe.
Of the 15 jurisdictions with the greatest petroleum reserves, the five that rank as most attractive or least likely to deter investment are Texas, United Arab Emirates, Alberta, Kuwait, and Egypt.
The five least attractive of the large-reserve jurisdictions for investment on the basis of their Policy-Perception Index scores – Venezuela, Libya, Iraq, Indonesia, and Nigeria – account for 41 percent of the proven oil-and-gas reserves included in the survey.
In the group of 39 jurisdictions with medium-sized reserves, the 10 most attractive for investment are Oklahoma, North Dakota, Newfoundland & Labrador, West Virginia, Norway – Other, Wyoming, Norway – North Sea, United Kingdom – North Sea Offshore, Arkansas, and the Netherlands.
The 10 least-attractive jurisdictions for investment, beginning with the worst, are Venezuela, Bolivia, Libya, Iraq, Ecuador, Indonesia, California, Cambodia, France, and Yemen.
“Our analysis of the 2017 petroleum survey results indicates that the extent of negative sentiment regarding key factors driving petroleum investment decisions has increased in many of the world’s regions,” an analysis accompanying the survey stated.
“The United States remains the most attractive region for investment, followed by Europe. Canada’s score improved slightly this year, allowing this jurisdiction to maintain its spot as the third most attractive region in the world for investment.”
“When the attractiveness for investment is considered independently from the reserve size of jurisdictions (historically the primary focus of this survey), we find that the jurisdictions with Policy-Perception Index scores in the first quintile (suggesting that obstacles to investment are lower than in all other assessed jurisdictions) are almost all located in Canada, the United States, and Europe.
According to this year’s survey, the 10 most-attractive jurisdictions for investment worldwide are Texas, Oklahoma, North Dakota, Newfoundland & Labrador, West Virginia, Kansas, Saskatchewan, Norway – Offshore (except North Sea), Wyoming and South Australia.
“Four of the jurisdictions — Oklahoma, Texas, Saskatchewan, and North Dakota —consistently rank in the top 10, having been there in the last six iterations of the survey.”
According to the Fraser Institute, the survey responses were tallied to rank provinces, states, other geographical regions (e.g., offshore areas), and countries according to the extent of such barriers.
Those barriers, as assessed by the survey respondents, include high tax rates, costly regulatory obligations, uncertainty over environmental regulations, the interpretation and administration of regulations governing the “upstream” petroleum industry, concerns over political stability, and concerns over the security of personnel and equipment.
According to the report, a total of 333 respondents participated in the survey this year, providing sufficient data to evaluate 97 jurisdictions that hold 52 percent of proven global oil-and-gas reserves and account for 66 percent of global oil-and-gas production.
The jurisdictions that are evaluated are assigned scores on each of 16 questions regarding factors known to affect investment decisions.
These scores generate the Policy-Perception Index for each jurisdiction, which reflects the perceived extent of the barriers to investment.
The jurisdictions are then sorted into clusters, based on the size of their proven reserves, allowing for an apples-to-apples comparison of policy perception in the context of the resources available for commercialization.
By Alex Mills is the former President of the Texas Alliance of Energy Producers. The opinions expressed are solely of the author.
Compiled and Published by GIB KNIGHT
Gib Knight is a private oil and gas investor and consultant, providing clients advanced analytics and building innovative visual business intelligence solutions to visualize the results, across a broad spectrum of regulatory filings and production data in Oklahoma and Texas. He is the founder of OklahomaMinerals.com, an online resource designed for mineral owners in Oklahoma.