Abstract

The economic conditions and the E&P sector are massively interrelated. There is a clear indication that oil companies adjust their portfolio of exploration and production activities according to the changes in economic and financial conditions. In times of high oil prices, high cash flows and high risk appetite, companies seem to tilt their exploration and production activities towards risky areas. When oil prices are low, cash flows are constrained and the risk appetite is more modest, exploration strategies are typically more cautious