By Society of Petroleum Engineers staff What constitutes a successful exploration company? Why are some significantly more successful than others, and consistently so? And does size matter – does having the resources of a large-cap company contribute to that success, or in fact detract from it? As an investor, how do you choose a company to invest in? Iain Bartholomew, exploration and subsurface director, Centrica, and veteran explorer, sought to answer these and other questions, but suggests that the root of successful exploration lies in having a good “nose” for oil. “The difference between a large-cap company and a small one is simply one of scale” he said. “Large companies have to spread their risk between a combination of “near-field” exploration with a focus on adding short-term value to existing production hubs and “impact growth” exploration -- or finding the next big thing. “Small caps rarely have the safety net of a material, producing asset, so their focus is on finding new ones. But the bottom line for both is having a good exploration team,” he added. In each case, the need for good basic data and wide-ranging regional studies are crucial -- small-caps can achieve this just as well as the large ones, though they may have to be more innovative and resourceful in finding the data they need. The success of an exploration team depends on vast experience and knowledge and how this is used -- the “nose.” The understanding of risk and reward of an exploration portfolio is critical for both small- and large-cap companies. A larger company will have a different attitude to risk compared with a pure exploration company -- after all we depend on the larger companies for the majority of our energy supply, and they in turn have to answer to their stakeholders. But, having wise and experienced explorers will be what justifies that caution in the short term with new and viable assets in the long term. So what makes a good explorer or exploration team? Bartholomew suggested that it is a combination of elements. Geoscience -- and being excited about geoscience -- is the foundation. “It’s exciting -- even with vast experience, it is possible to find something new every day -- and intuition plays a large part in that. Exploration companies need to provide an environment with an element of freedom and even nurturing to bring out the best in their exploration team.” He further added that there is no substitute for the basics -- a solid understanding of the sub-surface, and immense patience. For Bartholomew though, it isn’t always about processes and procedures. “Sometimes success can depend on a random thought -- and the courage to follow your nose.” Bartholomew is a geologist at heart, beginning his career at Shell before becoming international exploration manager at Oryx Energy, and later head of geoscience at Hess. Roles as technical director at Vienco, vice president exploration and geoscience at Pluspetrol and technical manager at Venture have brought him to his current position as exploration and subsurface director for Centrica. He was also recently vice president of the Geological Society for a six-year period. He will be expanding on these thoughts about what constitutes success in exploration at the SPE London Conference on June 27 and 28.