Royal Dutch Shell is teaming up with independent explorer Tullow Oil to explore for oil in the Atlantic, in a sign the biggest oil companies accept dramatic measures are needed to turn around their weak record on finding oil.
Tullow said on Wednesday the planned partnership would focus on making transformational discoveries in underexplored frontier basins.
In the past decade and a half, independent explorers have led the way in opening up new multibillion barrel oil provinces in Africa and South America.
The collapse of oil prices to $10 barrel in the 1990s killed the appetite of industry leaders like Shell and Exxon Mobil for exploration in frontier areas. Instead they focused on less risky, but less lucrative investments, such as developing large, known finds.
The oil giants are now increasing their exploration budgets but analysts doubt they can quickly turn around their reliance on acquisitions of oil fields or smaller producers to replace the oil and gas they pump each year.
Shell's plan to tie up with Tullow could provide a shortcut to its effort to boost discoveries, by tapping into Tullow's expertise and a culture that encourages exploration risk-taking.
The venture builds on Shell's entry into Tullow's exploration licence in French Guiana in 2009, where the partners announced a significant discovery last year.
Tullow has grown from an industry minnow in the 1990s into Europe's largest independent oil explorer, with a market value of over $20 billion (13 billion pounds), on the back of major discoveries in Uganda and Ghana.
(Reporting by Tom Bergin; Editing by Hans-Juergen Peters and Jane Merriman)