Exploration and production companies are drilling more high-impact wells this year, with a much higher success rate than in 2021. This is a positive sign for global oil and gas supply, as the activity is picking up.
High-impact exploration is back after a dismal 2021, which saw a low success rate — one of the lowest on record — in finding new oil and gas resources, analysts say.
The much higher success rate of impact wells drilled so far this year is a good signal for global supply at a time when oil and gas prices are high and trade has been disrupted at the following the Russian invasion of Ukraine and subsequent sanctions and embargoes. on Russian oil.
So far this year, E&P companies have discovered more than 1.7 billion barrels of oil equivalent (boe) in high-impact wells, nearly four times the 450 million boe discovered for all of 2021 , Rystad Energy research showed this week.
According to Rystad Energy’s methodology, high-impact wells are ranked based on a combination of factors, including the size of the prospect, whether they would unlock new hydrocarbon resources in frontier areas or emerging basins, and whether they are “target areas” for the operator.
So far in 2022, the success rate for these wells has stood at 47%, well above last year’s meager 28% success rate, Rystad Energy noted.
The companies plan to drill 33 high-impact wells in 2022, the highest annual number since Rystad Energy began tracking the sector in 2015. Although the number of planned wells is only slightly higher than the 29 high-impact wells drilled last year the success rate of this is much higher, with an estimated 1.7 billion boe so far in 2022, compared to just 450 million boe in the disappointing 2021, which has seen success rates dip towards record levels.
Unlike previous years, oil and liquids accounted for the most discoveries, with 1.2 billion boe or almost 70% of volumes this year, while gas discoveries were around 550 million boe, according to Rystad Energy. By comparison, gas has accounted for most discoveries in recent years. The high ratio of oil discoveries to gas discoveries in 2022 was mainly the result of two significant oil discoveries offshore Namibia – Shell’s Graff and TotalEnergies’ Venus.
“Last year was disappointing for the discovery of gas and liquid volumes from high-impact wells, but 2022 is on track to offset this crisis. If the success rate seen in the first half of 2022 continues for any year, we could have one of the most productive annual volumes ever,” said Rystad Energy senior analyst Taiyab Zain Shariff.
Additionally, more than half of the wells drilled so far in 2022 are considered “society target”, suggesting that more operators are narrowing their exploration geographic scope and focusing on central regions instead. than in border areas, notes Rystad Energy.
According to another methodology and classification of high impact wells, activity also rebounds and will resume in the second half of 2022. Westwood Global Energy Group, which defines a high impact well as targeting more than 100 million boe prospect or any frontier play test , said earlier this month that high-impact drilling activity would resume in the second half of the year, with between 80 and 90 wells expected to have been drilled by the end of 2022, the number highest since 2019 when 98 high impact wells completed.
For the remainder of the year, South America will continue to be an exploration hotspot with more wells planned for the Suriname-Guyana Basin and offshore Brazil, writes Jamie Collard, Principal Analyst – Global Exploration and Appraisal at Westwood.
Following the successes offshore Namibia earlier this year, Africa will see a return to high-impact exploration in the second half, with key wells planned in South Africa, Mozambique and Zimbabwe.
This year also sees a return to high-impact exploration in the deep waters of the eastern Mediterranean after 2021, when no wells have been drilled, Westwood said.
After years of underinvestment in oil and gas, the return of high-impact drilling activity and higher success rates could be good signs for global oil and gas supply in the future.
By Tsvetana Paraskova for Oilprice.com
More reading on Oilprice.com: