Oil & Gas Exploration: The Tide Turns
Global exploration operations have stalled over the last year, resulting in a backlog of drill candidates and a great impetus to test world class prospects across the full range of global basins. Whilst companies like BP, and to a lesser extent Shell, have ’written off’ some of their high-risk prospects in frontier basins, driven by poor investor sentiment for hydrocarbons, a great many well-defined targets remain, in settings from rank frontier to new leads in mature basins. Indeed, a lot of these ‘wells to watch’ targets are bursting with promise, having been refined with more data and technology over the fallow drilling months.
Significant Oil & Gas Reserves Drill Ready
After the oil price drop in 2015, followed by a few years of low exploration dollar spend, frontier drilling for hydrocarbons hit new lows as global travel and operations restrictions accosted the industry in 2020. As we emerge from this hiatus, the dam is set to burst on a range of exciting prospects. A summary review of the global wells to watch scene, excluding poor data areas in China and Russia, suggests over 50 Bboe Prospective Resources can easily be mapped in the top 100 global prospects (of over 500 currently mapped), perhaps representing a reasonable chance of 7.5 Bboe of commercial additions over the next 12 months (using a frontier success rate of 15%). Hotspots (as illustrated on the map) include likely high-impact basins in Mexico, Brazil, US Gulf of Mexico and the Middle East, but mature provinces in Angola, Gabon, the UK North Sea and Egypt still have very significant potential, and newcomers Namibia and Suriname amongst others are gearing up to impress. Gaps are also appearing. The North Atlantic margin basins are poorly represented, perhaps reflecting the new policy-driven exploration strategy of oil and gas players.
World Class Hydrocarbon Prospects
Standout target prospects include the Venus well in Namibia (Total), which could crack open the vast Orange Basin of Namibia and South Africa. The Ondjaba-1 well in Angola likewise could broaden the ultra-deep play there, drilling in a record breaking 3,628m water. The Levant basins host two major gas targets in Zeus (Energean) offshore Israel and Block 9-1 (Eni) offshore Lebanon. The Brazilian pre-salt play is expected to keep on giving, with ExxonMobil amongst others targeting very large volumes with Opal and Titan. The remarkable success of Guyana is slowly migrating to Suriname as the true extent of the ‘Canje’ trend is revealed, with at least five new field wildcats planned along trend from the recent Maka Central discoveries. In south Asia local NOC firms are lining up major gas targets onshore Bangladesh (Kanchan-1, OVL), India (ONGC) and Myanmar (Woodside and Posco). The Dorado trend in NW Shelf Australia will be targeted by the likes of Santos (Apus-1) while Repsol will test the large Rencong gas prospect in Indonesia. Many of the major oil companies have continued through 2020 with large 3D surveys in offshore basins in Senegal (Total) and Egypt (Total, Shell, BP) with major new prospects being rapidly matured on the back of these new data.
The challenge then is to pin down this high value drill queue and ramp up new reserves to meet the inevitable increasing global demand post pandemic.