Oil Explorers Drill Deep for Project Funding  WSJ

For oil and gas explorers, turning reserves into production isn't a cheap business. Thanks to the European banking crisis, it's about to get even more expensive.

French banks such as BNP Paribas, Crédit Agricole and Société Générale have long dominated the market for loans to oil companies secured against reserves. But these banks are now raising prices and cutting credit. For exploration and production companies, finding funds could soon get as hard as finding oil.

An example of the evil synergy of peak oil and a banking crisis looms. The EU banks need additional capital and to improve their reserves, which is NOT facilitated by large loans for drilling wells in very deep water. Who wants to be the creditor for the next Deep Water Horizon event? Perhaps some of the oil companies will find a way to turn some of their profits from existing wells into bank stock in return for new loans -- or not.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."