Global Oil, Gas Discoveries Hit Four-Year High in 2019
2019 was the best since 2015 for new hydrocarbon supplies. Over 13 billion barrels of oil have been found off west and southern Africa, in Latin America and Europe whilst Russia, Mauritania, Iran and Cyprus offered significant new natural gas resources. See figure 1.
Newcomer Guyana in Latin America has already announced a series of finds totalling some 1.8 billion barrels of crude. But this is just the start. The U.S. Geological Survey estimates recoverable reserves at over 13.6 billion barrels of oil and 32 trillion cubic feet of gas – the second highest resource potential among unexplored oil basins in the world.[i] It is not surprising therefore that oil companies, both big and small, including Exxon, Tullow and Repsol are actively leading drilling campaigns in this frontier oil province.
On the other side of the Atlantic BP discovered 1.3 billion barrels of oil equivalent in the Orca field off Mauritania. [ii] This find, together with other natural gas discoveries in the region, could be sufficient to support a major LNG export project. Meanwhile, Ghana-based oil company Springfield, announced an estimated oil-in-place volume of up to 1.5 billion barrels of crude and 0.7 trillion cubic feet of gas[iii] from its latest drilling programme.
Elsewhere in Africa, French firm Total’s Brulpadda offshore South Africa field [iv] could hold 1.5 to 3 billion barrels of natural gas, with more likely to be found. If the gas is converted into power, it could provide an affordable and reliable source of cheap energy for the power-hungry country and boost this hard-pressed economy. Even better, the Mossel Bay PetroSA refinery is located conveniently nearby for processing the output of this discovery.
Russia’s Gazprom has made two important natural gas discoveries in the Kara Sea near the Yama Peninsula. The 390.7 billion cubic metres (bcm) of recoverable gas reserves in the Dinkov field and the 120.8 bcm Nyarmeyskoye field. [v] Together these finds should help boost Russia’s ability to become a world-leading LNG exporter to customers in Asia.
Western Europe was the source of three important discoveries. In 2019, ExxonMobil added to recent finds in the eastern Mediterranean with its discovery of a gas-bearing reservoir off Cyprus. However, infrastructure challenges and the ongoing failure of Turkey to recognise the Cypriot exclusive economic zone under the United Nations Law of the Sea, means that exploitation of this new discovery is likely to be delayed.[vi]
Elsewhere in Europe, Chinese state-owned CNOOC and partner Total have announced the largest discovery made in UK waters in a decade – the mighty Glengorm gas field in the Central North Sea. Glengorm’s recoverable resources are estimated at around 250 million barrels of oil equivalent.[vii] Further north in the Norwegian sector of the Barents Sea, Equinor’s Sputnik exploration well indicates a recoverable resource of between 20 to 65 million barrels of oil.
Top exploration companies
According to Rystad Energy the top five exploring companies in 2019 were Exxon, Hess, CNOOC and Total whilst the top five hydrocarbon discoveries were made in Guyana, Russia, Mauritania, Iran and Cyprus. See figure 2.
Accounting firm PricewaterhouseCooper estimates that global upstream capital expenditure rose modestly during 2019 and anticipates a recovery of exploration spend in the coming years.
With global oil discoveries at some 1.73 trillion barrels, according to BP’s Statistical Review of World Energy [viii] and annual oil production running at 94.7 million barrels per day, the world has enough oil for at least another half century. At the same time new discoveries and new oil producers are further weakening OPEC’s ability to influence the global oil market.[ix]
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