Least surprising headline of the day: “Exxon Struggles To Find New Oil”

"Exxon Mobil Corp., the world’s largest publicly traded oil company, is struggling to find more oil.

In its closely watched annual financial report released Tuesday, the company said that for every 100 barrels it has pumped out of the earth over the past decade, it has replaced only 95."

This news is not in the least bit surprising to those who follow oil (see Science/IEA: World oil crunch looming? Not if we can find six Saudi Arabias!).

Ironically, the news comes from the Wall Street Journal, whose editorial page remains an opponent of all strategies to end our addiction to oil before the brutal dislocations of peak oil force us to. Here’s more of the story:

"It’s a conundrum shared by most of the other large Western oil-producing companies, which are finding most accessible oil fields were tapped long ago, while promising new regions are proving technologically and politically challenging.

Exxon said in the report that it more than made up for the shortfall in oil by stocking up on natural gas, mostly through its acquisition of XTO Energy Inc. last year.

But the shift toward gas is troubling some investors, because gas sells for less than the equivalent amount of oil. Many observers feel the move toward gas—a trend across the oil industry—is dictated more by shrinking access to oil fields than by a strong desire to emphasize gas production.

“The good old days are gone and not to be repeated,” says Fadel Gheit, an analyst with Oppenheimer and Co. Bringing additional reserves from gas “is not going to give you the same punch” that oil would, he said….

Big oil companies are having trouble cashing in on the strong prices for crude oil. They have limited ability to drill in many oil-prone regions, such as Russia and part of the Middle East, due to politics. And even in promising Iraq, where many Western companies have won contracts, much infrastructure must be rebuilt. Exxon and others have also flocked to the oil-rich sands of Northern Alberta, Canada, but digging out the oil across vast swathes of forest comes at relatively high cost and generates concerns about the environmental impact."

Of course, “One place where Western oil companies have found open doors is in deep-water exploration” — something we can all look forward to in the wake of the BP oil disaster.

"Some companies also are seeking permission to drill exploratory wells above the Arctic Circle. The Arctic remains one of the few unexplored regions of the world and the region above Alaska and western Canada is believed to be oil rich. But deep-water projects take a long time to turn from a prospect that a geologist has identified into a producing asset.Chevron Corp.’s chief executive said last week that he expects to add new barrels of oil to its reserves from “several major deep-water projects” in future years. In 2010, he warned that Chevron added only one new barrel for every four it produced."

Drill, baby, Drill