Do oil companies keep leasing unproductive land just to keep rival oil companies from drilling there?

It is possible there is a little of that, but as a rule, they acquire the leases because they desire to drill there.





The problem is, often after they get the leases, the EPA and other govenmental, environmentalist, and neighborhood organizations, more often than not, put up so many road-blocks and red-tape that sometimes it can take years and years to get through them all to actually be able to drill on the site. Just having the lease is not enough.





The oil companies have to make a judgement call on some of the leases. If they think that a particular site will require years of pain, and they know that in the end, they know they will not make a profit, they will just sit on the lease until such time as crude prices rise to the level that the painful process becomes worth it. At least then there is a chance of a profit on the other end.





It might help to give an analogy.... A home builder might buy parcels of land that he intends to develop at some point. Just buying the land does not mean he can build. He still needs to get the appropriate permits. The builder might build immediately, or wait. He will make a judgement whether to build now or later based on what homes are currently selling for. In the end, it is all very simple, and what any reasonable person would do in the same scenario.Do oil companies keep leasing unproductive land just to keep rival oil companies from drilling there?
Considering how much money they pay for them and how much money they stand to make if they produce the answer to your question is no. That wouldn't make any sense. Stuboston is exactly correct. Just having the lease isn't enough. Many times environmentalists and other can tie up these leases in legal battles. On the other hand many of the leases don't have any oil in them or it has oil but due to various factors cannot be produced economically.Do oil companies keep leasing unproductive land just to keep rival oil companies from drilling there?
yes, it keeps the wildcatters out.





they have leased tens of thousands of acres in my county since the 80's. wells drilled--zero.
duh ... no.





and many of those leases had original 25 year lives. after you've explored and found them to not be worth drilling with present technology what would you do? give it away after you've bought it?



Nah, it's a tax write-off plus it does keep other companies away from an area that is producing. It sure isn't just to throw money away for no reason.
yes and also keeps up the price of real estate until recently i think?