Despite conventional oil and gas exploration spend anticipated to top $50 billion for the first time since 2019, operators aren’t seeing expected results, Rystad Energy reports. (Source: Shutterstock.com)
Despite conventional oil and gas exploration spend anticipated to top $50 billion for the first time since 2019, operators aren’t seeing expected results, Rystad Energy reports.
“Upstream companies are facing a period of uncertainty. They are eager to capitalize on the increased demand for fossil fuels and find additional resources, but recent results have been lackluster,” Aatisha Mahajan, vice president of upstream research at Rystad Energy said in a press release. “If exploration efforts continue to yield unimpressive results for the remainder of the year, 2023 could be a record-breaker for the wrong reasons.”
According to Rystad, explorers found 2.6 Bboe in the first half of 2023, 42% lower than the first half of 2022. So far, 55 discoveries have been made with discoveries averaging 47 MMboe — lower than the 56 MMboe per discovery for the same period in 2022.
The offshore industry accounted for about 95% of exploration spending year to date but only about two-thirds of discovered volumes. Offshore discoveries are spread relatively evenly between ultra-deepwater, deepwater and shelf finds. Rystad expects to see an increase in drilling activity for the remainder of 2023, with 27% projected growth in spud wells versus 2022.
Despite high impact wells only yielding a 31% success rate, majors are expected to continue to drive spending. Six companies are expected to spend $7 billion on exploration — a figure 10% higher than last year. Exploration activity will likely gain momentum in the second half of 2023, with crucial exploration wells planned to be drilled. Overall, Rystad forecasts that the majors will contribute 14% of total global exploration spending in the coming months.
Though exploration has not yielded the desired results, Rystad believes there is some success to be had this year, as only 30% of anticipated wells have been completed. Only 23 of a remaining 56 exploration wells have been or are expected to be drilled this year, meaning 60% are likely to be drilled or postponed until 2024. Even if 2023 proves unsuccessful, a rebound could be on the horizon for next year.
Recommended Reading
IOCs See Opportunity in Offshore Mexico, Despite Potential for Policy Changes
2024-08-14 - Five IOCs with offshore experience and capital—Eni, Harbour, Talos, Wintershall Dea and Woodside—continue to pursue promising opportunities offshore Mexico despite the country’s energy sovereignty push in favor of state-owned entities Pemex and CFE.
VTX Energy Quickly Ramps to 42,000 bbl/d in Southern Delaware Basin
2024-09-24 - VTX Energy’s founder was previously among the leadership that built and sold an adjacent southern Delaware operator, Brigham Resources, for $2.6 billion.
EOG Testing 700-ft Spacing in Ohio’s Utica Oil Window, Sees Success
2024-08-05 - EOG Resources’ test at the northern end of its 140-mile-long north-south leasehold produced IPs similar to those from a nearby pad.
Exxon Surprises with Smaller FPSO for Guyana’s Hammerhead Project
2024-07-19 - Exxon Mobil Corp. announced plans for its seventh development offshore Guyana, Hammerhead, which will add 120,000 bbl/d to 180,000 bbl/d of production capacity starting in 2029.
Petrobras to Add Two FPSOs Offshore Brazil in Second-half 2024
2024-08-12 - Petrobras will bring online 280,000 bbl/d of production capacity in the second-half 2024 with the addition of two FPSOs offshore Brazil.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.