The global economy is in downturn in the year of 2013 and 2014. Energy demand is weak, and the international oil companies are generally facing depression in production and operation, and the most representative example is Shell’s profit warning.  After the issue of profit warning in the early 2014, Shell made some adjustments in the operation strategy, mainly including the strict control of investment, the control of the number of large projects and the divesting of non-core assets. In the meantime, Shell relies on the application of key technologies to reduce costs and improve ROI level. Other international companies took the similar measures with Shell to overcome the economy downturn. Although many international oil companies represented by Shell put forward prudent investment strategy, they did not give up the established long-term development strategy, still taking gas, unconventional, polar, deep-sea oil and gas as the upstream business development goals. Overall, long-term strategies of oil companies has not been changed. There are only some changes in the point and node of executions.

Global oil price is keep falling since mid-2014, which is making for the oil and gas industry overwhelmed. The operation and management situation of the oil company was becoming bad from 2013, and the low price of oil make it worse in 2014. In this situation, “tighten investment type” made by the oil companies has been further consolidated and strengthened since early 2014,  The oil companies continued divesting non-core assets, deferring longer period investment with high risk,  strengthening control on investment volume. In that case, it influenced a lot on the upstream investment of the capital-intensive oil companies, so the exploration bears the brunt. In 2014, a A famous consulting agency released analysis report. It shows that when oil price is lower than $ 80 / barrel, oil companies will cut the investment budget on exploration investment. The current situation is that the oil price has fallen down to $ 60 / barrel. As see from the current performance of oil companies, the agent’s forecast and analyze has its accuracy.

In December 2014, the latest data showed that not only large oil companies compressed the investment, but the world's 47 representative medium or huge oil companies are also planning to cut 2015 investment budget in different degree. Due to low prices of the oil, the exploration work of the oil companies will be focus on maturity blocks, and the basic strategies of investment influence their interest in buying the assets. Some large companies even tend to sell assets to improve cash flow. According to the M & A market's performance in 2014, we can see that Shell, Total, Chevron, are the major asset transfer in oil and gas market. Wood Mackenzie thinks the global new oilfields investment decision ($ 127 billion) may be retarded. Regarding the long-term expectations that the oil prices will keep falling, The oil companies put more attention on the low risk and mature blocks and blocks to reduce the costs and avoid investment risk. As showed by the historical data, the oil companies obtain reserves mainly by extending and discovering oilfield, that is, oil exploration is the main means of obtaining reserves. The current low oil price has affected the oil company's exploration decision, if the situation goes on and oil companies continue to reduce exploration investment, there may be adverse impacts on future oil reserve replacement rate, reserve-production ratio and other indicators for the year. Those indicators are important index to evaluate whether upstream capacity is sustainably developed.

The production growth of US shale oil is an important reason for the current reduce of oil prices. The current situation is, although the oil price reduces significantly and there are no signs of a rebound, the shale oil production is growing now. Data in January 2015 show that, in the period of low oil price, seven US shale oil productions are still growing, and shale oil industry still showing vitality. If Saudi Arabia does not cut its oil capacity and other emerging developing countries like China decreased crude oil demand growth, low oil prices will continue for some time. Even if rebounds, the intensity will not be so much. Therefore, oil exploration will usher a test of a long period because of low oil prices. How to improve efficiency has become an important issue faced by policy makers at this stage. It becomes an important operation strategy to carry out technological innovation to improve exploration efficiency and reduce oil and gas production to maintain the reserve replacement rate, stable reserve-production ratio and other indicators.

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