New offshore oil investments needed to avoid shortages, Hess exec says – Hess Corporation (NYSE:HES)

Increased investments in offshore oil production are critical to avoiding a supply squeeze by 2020, as expanding shale output will not match thr projected rise in demand in the next few years, Hess (NYSE:HES) COO Greg Hill tells an energy conference in Houston.

“The world is going to have to invest in more than shale,” according to Hill, whose company has projects in offshore Guyana, Gulf of Mexico, and Gulf of Thailand.

While deepwater projects require significantly higher capex than conventional or shale production, those costs are declining as the industry gains greater efficiencies, Hill says.

But energy producers are focused on investing in shale areas such as Texas’ Permian Basin because of shorter-term payback and lower risk fields, said Bobby Tudor, chairman of Tudor Pickering Holt, who addressed the same conference.

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