The drillship Noble Sam Croft drilled the Keskesi East discovery well in the Total-operated block 58 offshore Suriname.
(Courtesy Noble Corp.)
Offshore staff
LONDON Exploration drilling will likely follow current trends over the next five years, according to a webinar staged by Westwood Global Energy Group last week.
Dr. Keith Myers, president of Research, speaking at Exploration 2026: the impact of the energy transition, said exploration activity continues to correlate strongly to the oil price. The higher the price, the more cashflow that is available, along with perceived higher returns on exploration.
But more drilling does not necessarily mean more success, he cautioned, so smaller, more successful exploration in future might not be a bad thing.
Westwood calculated that 81% of the global oil discoveries in 2010 (the total volume proven was 9.6 Bbbl) are now in production, led by Johan Sverdrup in the North Sea and Bzios in the Santos basin offshore Brazil.
However, only 6 tcf of the gas discovered in the same year has so far gone forward to development. Oil, not gas, remains the focus for explorers as companies seek to cover future demand for energy.
And even under a 1.5 global warming scenario, he added, there will still be plenty of take-up for oil discoveries made in 2026, if the forecasts are correct.
At the same time, operators will push for resilient exploration that can deliver short-cycle field developments. $40 as a full-cycle breakeven price seems a reasonable numberThere is no point discovering something that could take 20 years to produce, so [explorers] will be targeting five years to production and 10 years to break even.
Prospective developments will either have to meet net zero scope 1 and 2 criteria, or be viable at future carbon prices. A low-hydrocarbons footprint could attract customers.
Over the past five years, Myers continued, spending on exploration capital in mature plays rose to 58% (compared with 44% in 2010-14), while over the same period, frontier exploration declined from 28% to 20%. But by 2026, currently hot plays such as offshore Suriname could be maturing, so the industry will still need frontier successes in other regions.
Recent frontier activity has focused more on proven plays to deliver high success rates, and this trend looks set to continue, he said. Westwood has identified up to 60 potential frontier wells that could be drilled over the next five years targeting 28 oil plays in total.
The typical success rate of frontier drilling is 8%, but two to three of these new plays could work, resulting in the statistical likelihood of finds containing 2 Bbbl or less. But the hurdles for drilling in frontier basin will also get higher over the next five years.
Infrastructure-led exploration should remain strong, delivering high-value (although low-volume) barrels, especially to small or mid-size E&Ps in northwest Europe. Where the focus is on gas plays, this will be with a clear route in mind to market the gas (i.e. Egypt).
This year, 83% of wells are targeting oil, and the industry is still finding a lot of gas relative to oil. In the mid-term (2021-23), Myers added, Latin and Central America will remain the most active regions.
The exploration hotspots out to 2026 will likely be similar, but with an emphasis on lower well costs - unless there are significant, basin-opening discoveries.
05/03/2021
Here is the original post:
Frontier drilling has a future in energy transition, Westwood claims - Offshore Oil and Gas Magazine
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