Frontier Exploration Drilling In 2021 Hits Lowest Point Ever Recorded
Intelligence provider Westwood Global Energy has found that frontier exploration drilling dropped to the lowest level ever recorded by the company.
Westwood said that high-impact drilling activity in 2021 was at a similar level to 2016-2018, with 74 wells completed. The discovered resource was disappointing, down from 19 billion boe in 2020 to 6.6 billion boe in 2021, split 36 percent oil and 64 percent gas. The commercial success rate declined from an unusually high 41 percent in 2020 to 31 percent in 2021, but still higher than the 23 percent average in 2016-2018.
As in 2020, discovered resource in 2021 was dominated by a small number of large discoveries in Russia, which together accounted for 3.2 billion boe or 48 percent of the total.
Outside Russia, discoveries in 2021 were at the lowest level – 3.4 billion boe – since at least 2008. The largest discovery of the year was at the Zinichev discovery in the Yenisey-Khatanga Basin onshore Russia. This discovery was the only discovery in 2021 estimated to be over 500 million boe, compared to 2020 when eight discoveries over 500 million boe were made. The largest discovery outside of Russia is Eni’s Baleine discovery offshore Cote d’Ivoire.
Frontier exploration drilling fell to the lowest level ever recorded by Westwood – since 2008 – with only 15 frontier wells completing and only one making a potentially modest-sized commercial discovery. Emerging play exploration was dominated by the Upper Cretaceous play offshore Suriname-Guyana where four discoveries added an estimated 1 billion boe.
High impact drilling in more mature, established plays delivered 13 potentially commercial discoveries and a 43 percent commercial success rate, however, only seven of these appear to be above 100 million boe post-drill.
According to Westwood, 72 companies participated in the 74 high-impact wells drilled in 2021, with 38 companies participating in only a single well. The most active high-impact explorers were Exxon with 13 wells, Total, Petronas, and Shell with nine wells each. Rosneft and BP were the only companies to deliver over 1 billion boe net due to their exposure to some large discoveries in Russia. Repsol and Eni fell out of the list of most active explorers participating in only three high-impact wells each. Both companies have stringent net-zero targets.
The company stated that 2021 showed there was no obvious loss of appetite for high-impact exploration at the drill bit, but the decline in frontier exploration drilling shows that the industry is less concerned with long-term renewal and is instead focused on quicker returns.
The outlook for 2022 drilling plans suggests this pattern will continue in 2022 with 70-80 high impact wells expected to complete in the year, a similar level to 2020/21.
Hot spots for drilling in 2022 will be mostly in South America, particularly in the Suriname-Guyana Basin and offshore Brazil. The Gulf of Mexico will be a hotspot, both offshore U.S. and Mexico, and key wells are also expected in the Flemish Pass offshore Eastern Canada.
After a quiet few years, Africa is expected to see key frontier tests in the Orange, Rio Muni, Mozambique, and Lamu basins. Northwest Europe should see around 10 high-impact wells drilled which is a similar number to 2020, but ell down on the 27 high impact tests drilled in 2019. The Middle East may see the largest prospect drilled in the Iranian Caspian Sea.
The combined unrisked predrill resource potential in 2022 is estimated to be around 30 billion boe which Westwood estimates as 8 billion boe on a risked basis.
“So, despite the energy transition, the E&P sector has so far maintained the high impact well count. Whether this will continue beyond 2022 is the question. The 2022 exploration program is dominated by commitment wells on licenses acquired prior to 2020. Things may change in 2023 and beyond, as current portfolios are drilled out and if acreage is not renewed in response to energy transition pressures,” Westwood stated.
To contact the author, email email@example.com
What do you think? We’d love to hear from you, join the conversation on the
Rigzone Energy Network.
The Rigzone Energy Network is a new social experience created for you and all energy professionals to Speak Up about our industry, share knowledge, connect with peers and industry insiders and engage in a professional community that will empower your career in energy.
Editor | Rigzone