Top Year for High-Impact Global Exploration in the Cards

Abstract

This year is being viewed as a bounce-back period for high-impact oil and gas drilling after a lackluster 2023, with Africa and Latin America pegged to lead the way. Researchers at Rystad Energy have identified 36 potential high-impact wells to be drilled or spud in 2024, the highest annual total since it started tracking the market in 2015. This year’s slate would mark a sizable jump from the 27 high-impact wells drilled in 2023. Of the 36 potentially significant wells, 13 are in Africa and 10 in Latin America, accounting for almost 64% of the global total. Explorers will drill six of these in Asia, two each in the Middle East, Europe, and North America, and one in Oceania with TotalEnergies’ planned exploration in Papua New Guinea. Rystad found only eight of the 27 high-impact wells drilled in 2023 resulted in commercially movable volumes, a success rate of less than 30%, well below the annual average of 42%. These wells discovered volumes of 1 billion BOE, a sharp decline from the 3.5 billion BOE found in 2022, and they accounted for 20% of the 5 billion BOE discovered by all exploration activities globally last year. In addition, 2023 was an expensive year, with drilling costs rising due to a significantly tighter rig market than in prior years, worsening the blow of a low success rate. Rystad Energy classifies high-impact wells through a combination of factors including the size of the prospect, whether they would unlock new hydrocarbon resources in frontier areas or emerging basins, and their significance to an operator’s strategy. Of the high-impact wells planned this year, 14 will be drilled in frontier and emerging basins, with three opening new plays entirely. Eight planned high-impact wells target prospective offshore resources of more than 430 million BOE and considerable prospective onshore resources of more than 230 million BOE, according to the research firm. The remaining 11 wells are strategically relevant for their respective operators, meaning exploration success would help them gain traction in the region or inform future operational decisions. If all planned wells proceed as scheduled, 2024 would see the highest number of high-impact wells drilled in at least 10 years. Oil majors like BP, Chevron, Eni, ExxonMobil, Shell, and TotalEnergies will dominate high-impact well drilling. About 16 (44%) of the total wells planned will be drilled by these companies, with TotalEnergies planning five, Shell three, and Chevron, Eni, and ExxonMobil targeting two each. Most drilling will be undertaken in the Atlantic margin and Asian waters. National oil companies and internationally focused NOCs will account for eight (22%) of this year’s planned wells, with upstream operators responsible for 17% and smaller operators for the remainder, according to Rystad. Around 70% of African wells will be drilled in frontier and emerging basins or will open new plays. Important frontier wells include in the Red Sea offshore Egypt, in the Angoche Basin offshore Mozambique, and in the Namibe Basin offshore Angola.