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Norwegian Operator Claims “Substantial Oil Discovery” In Gabon, Extending the Hibiscus Field Further North

By Macson Obojemuinmoin

Oslo listed BW Energy has announced “a substantial oil discovery with good reservoir quality” in the DHIBM-7P pilot well drilled to appraise the northern flank of the Hibiscus field, in the Dussafu licence, offshore Gabon.

BW did not provide figures for the find, but it declares its “plans to complete the well as a production well later in 2024”.

It says that its preliminary evaluation indicates a notable increase in both the volume of oil in place and gross recoverable reserves.

“As final data becomes available, technical personnel will be engaged in updating the analysis for publication of the uplift at a future date”.

The DHIBM-7P pilot was drilled from the MaBoMo production platform to a total depth of 3,941 metres. The target area is located approximately 1.5 kilometres north-northwest of the MaBoMo and was drilled by the Borr Norve jack-up rig. Evaluation of logging data, sample examination and formation pressure measurements confirm approximately 24 metres of pay in an overall hydrocarbon column of 37 metres. Notably, the hydrocarbon column extends across the boundary between the Gamba and the underlying Dentale formation. This is the first example of a common Gamba-Dentale hydrocarbon accumulation in Hibiscus Field.

“This is yet another confirmation of the significant potential of the Dussafu licence, which BW Energy is rapidly unlocking through low-cost and low-risk development activity,” said Carl K. Arnet, CEO of BW Energy.

The next operation will be to place a production well (DHBSM-2H) in the northern flank of the Hibiscus South field that was recently successfully appraised.

 


XOM Succeeds with a Near Field Exploration Well offshore Angola

By Fred Akanni

Angola’s Upstream hydrocarbon regulator ANPG has announced the successful drilling of an exploration well, Likembe-01, located in the Kizomba B development area, in Block 15, operated by ExxonMobil, in partnership with Azule Energy, Equinor and Sonangol.

“Drilled between the months of February and April, 2024, the well is located at a water depth of 1,200 metres, having crossed reservoirs of Miocene age and reaching a final depth of 3,013 metres, within the perimeter of the Kizomba B development area, in accordance with presidential decree 5/18 of 18 May, which allows additional exploration activity within development areas”, ANPG says in a release

The regulator notes that in the wireline logs and other interpretive tools recovered from the drilling, “it was possible to identify the existence of high-quality sand packages impregnated with hydrocarbons”.

ANPG explains that “Likembe-01, is the first well drilled within the scope of the preliminary agreements of the Incremental Production project, which is being approved by the Executive, aiming to provide incentives to investors to produce additional volumes in concessions currently in production, such as fundamental strategy for the sustainable development of the Angolan oil sector”.

The Angolan Ministry of Mineral Resources, Oil and Gas (MIREMPET) and the ANPG, have  “been working towards obtaining approval by the Executive of the Incremental Production project in line with development objectives sustainability and improvement of operational efficiency, in the Petroleum Sector, intended by ANPG”.


CGG Launches the Second, and Third 3D Reimaging Projects in “Hot Spot’ Côte d’Ivoire Offshore

By Toyin Akinosho, in Abidjan

The Norwegian geoscience company, CGG, has announced two more new multi-client, three dimensional (3D) seismic reimaging programmmes, to cover several acreages offshore Cote D’Ivoire, a country that has become a new hydrocarbon exploration hot spot.

The projects, named CDI24 Phase I and Phase II, come after the CDI23 (6,430 km2) carried out in late 22023 and they are all being produced in association with the country’s hydrocarbon regulator, Direction Générale des Hydrocarbures (DGH) and the state hydrocarbon company, PETROCI Holding (PETROCI).

“Both projects are supported by the industry, with Phase I commencing immediately and Phase II planned for H1 2025”, CGG says in a statement.

Cote D’Ivoire  returned to reckoning in the global oil patch after ENI, the aggressive Italian explorer, announced the discovery of Baleine field in the country’s deepwater Blocks CI-101 and CI-802 in September 2021. ENI has estimated 1.5 and 2.0Billion barrels of oil in place and between 1.8 and 2.4Trillion cubic feet (TCF) of associated gas for the accumulation, which was  also the first commercial discovery, made in the country since 2001.

The new programmes will be merged with the CDI23 (6,430 km2) reimaged data (originally marketed as 2023/2024 PDSM), to create a seamless and contiguous total volume of over 16,000 km2, overlapping the recently announced Calao discovery and adjacent to the world-class Baleine field.

CGG claims it is utilizing its latest proprietary imaging technologies and highly specialized high-performance computing “to provide the best possible results from legacy 3D seismic to support exploration offshore Côte d’Ivoire”.  It  describes its tools as  cutting-edge and lists them as  time-lag FWI, Q-FWI, Q-Kirchhoff and advanced deghosting and demultiple techniques, which, the company says, “aim to produce clearer images of the deep structural plays not visible in the legacy data, as well as imaging the Calao Cenomanian and Baleine Carbonate fairways at unrivalled resolution, providing a step-change in understanding of the opportunities in the region”.


ReconAfrica to Spud its Second Seismically Defined Well Onshore Namibia

Canadian minnow, ReconAfrica is returning to the rig site in the Kavango Basin in the north of Namibia, 18 months after the furore that greeted its first seismically defined well in the country’s onshore.

The Company expects to begin drilling Naingopo (Prospect L), in June 2024, “targeting 163Million barrels of unrisked prospective oil resources or 843billion cubic feet of unrisked prospective natural gas resources based on the most recent prospective resources report prepared by Netherland, Sewell & Associates, Inc. (NSAI) dated March 12, 2024”, the company notes in a statement.

ReconAfrica’s primary target is no longer the prospects in the so-called Karoo rift, but now the Damara Fold Belt, the company explains.

Construction of the well pad and access roads have commenced and ReconAfrica has shared its drilling programme and future drilling and subsurface data acquisition plans with its partner, the state hydrocarbon company NAMCOR and the Ministry of Mines and Energy

The Toronto listed explorer, in 2021, drilled two stratigraphic test wells in the Kavango Basin, at the time described by the Canadian geologist Tako Koning, as “an unregarded sedimentary basin”.  The 6-1 and 6-2 wells, the company reported, intersected over 300 metres and 200metres of oil and gas shows respectively. ReconAfrica did not call any of these a discovery. Indeed, it stated clearly that “the two wells were drilled to provide stratigraphic, sedimentological, reservoir and geochemical information”.  Although the data in both probes was very positive, neither 6-1 nor 6-2 was tested since they were designed to be only stratigraphic wells.

Makandina 8-2, drilled in late 2022, was ReconAfrica’s third well in the basin. It was the company’s first seismically defined probe in the campaign. It failed to encounter economic accumulations of hydrocarbons. The company placed the blame on the absence of a trap or a four-way dip closure. A lot of condemnation ensued, with some media reports cynically questioning the company’s claim that it had proven a working hydrocarbon system in the basin.

The next well is expected to drill to a depth of approximately 12,500 feet or 3,800 metres and is projected to encounter four primary reservoir intervals targeting both oil and natural gas.

Following the drilling of the Naingopo well, ReconAfrica is planning to drill a second Damara Fold Belt well, Prospect P, targeting 278Mllion barrels of unrisked prospective oil resources, or 1.5Trillion cubic feet of unrisked prospective natural gas resources, based on the NSAI Report.

Drilling of the second Damara Fold Belt well is expected to commence in the fourth quarter of 2024, subject to the results of the Naingopo well.


Shell Hits Paydirt in Sixth Exploration Well in Namibia

By Toyin Akinosho, in Johannesburg

Shell has made a discovery in Enigma-1X, its sixth exploration well in Petroleum Exploration Licence (PEL) 39 in Namibia’s prolific deepwater Orange Basin.

The UK supermajor had been on the probe since February 27, 2024, with the semi-submersible rig Deepsea Bollsta.

Enigma-1X is located 15 kilometres south-southeast of Shell’s Jonker-2A appraisal well.

The wildcat is part of Shell’s second multi-well exploration and appraisal campaign which began in December 2022, after the inaugural campaign that resulted in the announcement of the Graff-1 discovery.

Shel’s basin opening Graff-1, declared in February 2022, effectively launched the series of discoveries that have bolstered Namibia’s profile as a hydrocarbon hot spot, featuring hub sized wins by TOTALEnergies and Galp Energia and pulling the otherwise conservative Chevron into the fray.

But the size of the prize has been smaller for Shell than its European rival, TOTAL.

Shell’s Graff and Jonker accumulations have respectively been reported by the Namibian Ministry of Mines and Energy as holding between 250Million and 400Million barrels of oil estimated recoverable reserves each, whereas TOTAL’s Venus discovery, which came after Graff, reportedly holds in excess of 2Billion barrels of oil and is now the centre piece of the French major’s regionwide exploration and development effort in Southern Africa, including neighbouring South Africa.

If Jonker is the focus of Shell’s commercial project in Namibia s the energy press has widely claimed, the likelihood is that Shell is planning a development of a cluster of fields, as opposed to developing single accumulations.

Data evaluation of Enigma-1 is ongoing to determine its commercial potential.

 

 


South Africans Complete the Largest Geophysical Survey of any Acreage in South Sudan

South Africa’s state-owned petroleum company the Strategic Fuel Fund (SFF) has completed  its initial aerial survey over South Sudan’s Block B2, of which it is the operator  .

“We have successfully completed the geophysical survey of the block”, says K B Trivedi, SFF’s
Chief Geoscientist. “This is the largest survey ever undertaken in South Sudan, at 47,000 square kilometres, and the data acquired is very good. It was done by the South Sudan Geophysical Company, SSGC, which is a matter of pride for South Sudan, and a matter of pride for us as a partner of the country.”

Mr. Trivedi is widely respected in the geoscience community. A Certified Petroleum Geoscientist , he is currently President, Africa Region at the American Association of Petroleum Geologists (AAPG).

SFF plans to undertake an environmental impact assessment of the block over the next six months. That process commenced with a site visit begins in Bor, capital of Jonglei State.

SFF is working in partnership with Nilepet in the Nile Orange joint venture.


Why? NUPRC Yet to Publish Details of Frontier Basin Exploration Development Plan

By Adeniyi Adeoloye

The Frontier Exploration Fund section of Nigeria’s Petroleum Industry Act (PIA) 2021 was a -hot button issue during the final arguments leading to the passage of the PIA by the National Assembly.

The major contention was the money voted.

That 30% of state hydrocarbon company NNPC Limited’s profit oil and profit gas (as in the production sharing, profit sharing and Risk service contracts) goes to the Fund, aroused strong emotions from many industry watchers and the political class, particularly along the north-south divide. However, the fervour soon ebbed after assent of the bill by former President Muhammadu Buhari.

Following the enactment of the PIA, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the upstream regulator, formulated and gazetted several regulations aligning with the omnibus law. Among these regulations, the Frontier Basin Exploration Fund regulation is one that provides the window on the operational framework of the Fund.

On May 24, 2023, nearly 21 months after the PIA came into force, an opportunity to gain insight into the workings of the Frontier Exploration Fund emerged when NUPRC published the Frontier Basins Exploration Administration regulation. The objectives of this regulation are to “provide the general rules for the exercise of the Commission’s responsibilities with respect to frontier basins in Nigeria pursuant to section 9 of the Act”, and also to “provide a procedure for the administration of the Frontier Exploration Fund”; as well as to “attract investment to the frontier basins in Nigeria”.

Per the regulation, NUPRC is expected to “issue an annual Frontier Basin Exploration and Development Plan (the FBED Plan)”. Noting that the inaugural FBED Plan will be produced and published on the website of the Commission within three months of the regulation’s commencement, with expiration on the 31st December, 2023. Subsequently, the FBED Plan will be issued and published on January 1 of every year that follows. However, a look on the Commission’s website 3 months after the regulation was made, that is: August 2023, and later on January 1, 2024 showed no presence of the FBED Plan. Instead a strategy document released by NUPRC on January 1, 2024 titled “NUPRC Regulatory Action Plan 2024 & Near Term (2024 – 2026)”, highlighted the implementation of the Frontier Exploration Fund as part of its action plan to grow reserves and production, but lack details on the FBED Plan.

The FBED Plan as a document is supposed to contain the Commission’s exploration strategy for managing frontier acreages for the year under review. In addition, review of exploration work program in the frontier basins submitted by NNPC Limited, proposed expenditures from the Escrow Account that houses the fund, promotion of exploration activities, information on frontier basin petroleum resources, planning analysis for unassigned acreages, and outlining proposed drilling or testing operations that the Commission has requested NNPC Limited to undertake.

An inquiry to NUPRC seeking clarification on the FBED Plan as contained in the regulation up to the time of publishing this piece got the response “we are working on your request”.

Prior to the Frontier Exploration Fund, there was a division (Frontier Exploration Service) at NNPC, the predecessor entity to NNPC Limited, responsible for prospecting activities in frontier basins. Since the PIA came into force, this responsibility has been transferred to the regulator that now oversees the Frontier Exploration Fund.

In response to queries on the funding sources deployed in frontier basins, Olufemi Soneye, Chief Corporate Communication Officer of NNPC Limited stated that “Before the enactment of the Petroleum Industry Act (PIA) on August 16, 2021, Frontier Exploration activities in Nigerian Frontier Basins, including the Benue Trough and Chad Basin, were directly funded from the Federation Account. Post the PIA implementation, effective August 16, 2021, funding for frontier exploration operations shifted to Section 9 of the PIA. This involves 30% allocation from NNPC Production Sharing Contract (PSC) profit oil and gas, alongside service contracts”.

Soneye additionally expressed that “The initial exploration of the Kolmani field in Gombe/Bauchi States was funded through the Federation account. However, it now adheres to the PSC governance structure led by NEPL in collaboration with NNDC, spanning OPLs 809/810 in the Gongola Basin of Upper Benue Trough. Presently, as per PIA provisions, NNPC Ltd collaborates with NUPRC for Frontier exploration activities in basins without commercial hydrocarbon discoveries. The 2024 Frontier Exploration budget has been sanctioned by NUPRC in accordance with PIA provisions. Hence, the ongoing exploration in Nasarawa State – Middle Benue Trough (Ebenyi-1 well Drilling) and Borno State – Chad Basin (Wadi-2 well Drilling) are funded through the Frontier Basins Exploration Fund per PIA provisions. The Bauchi-Gombe Kolmani Integrated Field Development Project follows the PSC structure led by NEPL & NNDC”.

For clarity, NNDC (New Nigeria Development Company Ltd) is a company with roots from 1949 and later incorporated in 1965 to play development finance role in the northern states, and Nigeria as a whole.

The bottom line is that NUPRC’s failure to publish the specifics of the FBED Plan, as outlined in the regulation, has created an information gap on frontier prospecting operations spending, especially with the drilling campaigns in Nasarawa State, Borno State, and the ongoing “development” initiatives in Bauchi State by NNPC Limited. The lack of transparency becomes more apparent given the non production of the 2022 annual report from the state-owned enterprise, a document that would have showed the expenditure figures. For “regulatory certainty and predictability”, it is crucial for the regulator to follow the provisions outlined in its regulation.

Adeniyi Adeoloye, a petroleum geoscientist based in Calgary, Canada, is a consulting Editorial Associate with Africa Oil+Gas Report.

 

 

 

 


Will the Current Drilling in Tobias Oil Field Bring New Life to Angola’s Onshore Kwanza Basin?

By Tako Koning, Calgary, Canada

Oil industry analysts and observers, both Angola-based and overseas, are closely watching a well testing programme underway in the Tobias oil field, located in the onshore Kwanza Basin, approximately 90 kilometres south of Angola’s capital city of Luanda.

This oil field has been inactive since it was abandoned in 1998 during Angola’s long civil war.

However, Sonangol – Angola’s state oil company and London-based Corcel Plc are attempting to bring life back into Tobias.

In the past half year they have drilled two wells, Tobias-13 and Tobias-14 in the Tobias field and have embarked on testing both wells.  Should they be successful, this could lead to a sharply rejuvenated interest in other opportunities within the basin.

History of Exploration and Production in the Onshore Kwanza Basin

The onshore Kwanza Basin was the first basin in Angola to have undergone oil exploration and development.  The first-ever well to be drilled for oil was in 1915 in the valley of the Dande River about 40 kilometres northeast of Luanda.  Oil exploration occurred sporadically for the next four decades with no commercial success.  The Belgium-based oil company Petrofina was the most active of the oil companies in the basin.  Petrofina drilled Angola’s first commercial oil discovery at Benfica, near Luanda in 1955.  Oil production commenced in the same year and eventually 80Million barrels of oil were produced from the onshore Kwanza Basin. The oil was delivered through a small diameter pipeline to the Petrofina refinery in Luanda.  The company achieved maximum production in 1988 when it delivered 18,000Barrels of Oil Per Day (BOPD).  About half of this oil was from eight fields which produced from the Lower Cretaceous-age Binga Formation limestones and the other half was from Miocene-age sandstones in the Quenguela North field.

Due to escalation of Angola’s civil war and the danger of attacks by the rebel faction UNITA, Petrofina stopped producing oil in 1998 and terminated all its field developments in the basin. Consequently, ten small oil fields remained unproduced or under-produced and eventually the fields fell into a state of disrepair.  In the past half decade, a few bid rounds have taken place where several blocks were available for acquisition.  Sonangol and some small Angolan oil companies and junior international oil companies are interested in rehabilitating the old oil fields using modern oil field technology. The Angolan companies have included Somoil, Simples Oil, Tusker Energy and Mineral One.  Edmonton, Canada-based MTI Energy has also obtained operatorship and non-operatorship in a number of blocks in the onshore Kwanza and onshore Lower Congo Basins.

Re-development of the Tobias Oil Field

In the past year, a high-profile event has been the drilling of two wells in the Tobias oil field in 2023 by Sonangol and Corcel Plc. This has resulted in a much-heightened interest by oil companies in the onshore Kwanza Basin.

The Tobias field is situated onshore in the southern area of the Kwanza Basin. The field consists of 12 historic vertical wells drilled in the 1960s and 1970s by Petrofina.   The discovery well, Tobias-2 was drilled in 1961 and discovered oil in the limestones of the Binga Formation.  Tobias is structurally a deformed anticline approximately eight (8) kilometres long and 1 kilometre wide. The Binga in Tobias is a low porosity limestone with an average of 2.0% porosity but locally the matrix porosity can be in the order of 14%, according to legacy 1983 and 1991 publications by Schlumberger.  Production is possible mainly because of the intense faulting and fracturing resulting from the folding of this structure.  The Tuenza evaporites serve as the caprock.

Structural cross-section across the Tobias oil field, onshore Kwanza Basin. From: Schlumberger, 1991 (Well Evaluation Conference, Luanda).

Oil in the Tobias field has a density of 31 degrees API.  The top of the reservoir is at a depth of 520metres (1,710 feet).  The initial oil column was 350 metres (1,150 feet) and the bottom hole pressure was 53kg/cm2. Due to the intense natural fractures in the Binga, the initial oil production was high at 12,000BOPD by solution gas drive (Schlumberger, 1983).  However, production dropped rapidly, and water injection was necessary to maintain production.  Prior to Tobias being abandoned by Petrofina, the field produced a total of 29Million barrels of oil.

Corcel Plc has a 20% working interest (18% net) in Block KON-11 which is operated by Sonangol. Corcel is an Angolan – Brazilian oil and gas company focused on onshore upstream development as well as mining and mineral resources development.  Corcel also has a 22.5% working interest in Kwanza Basin Block KON-12 and 31.5% in KON-16.

Corcel is an AIM-listed company.  The Alternative Investment Market (AIM) is the London Stock Exchange’s (LSE’s) international market for small and medium size growth companies.

Corcel announced that Tobias-13, which was spud in September 2023 was drilled at a downdip location from historic production and reached its target depth of 959metres. Corcel’s press release mentioned that the full Binga reservoir section of about 120metres was encountered in the well as prognosed and intersected 80metres of Binga reservoir with several potentially productive zones in multiple intervals.  Corcel stated that the results of Tobias-13 implies significant hydrocarbon potential remaining.

Tobias-14 was drilled directly after Tobias-13 to its target depth of 781metres.  In a December 28, 2023 press release, Corcel said that Tobias-14 was located at the top of the Tobias anticlinal structure and is an offset to Tobias-4, the largest historic producer in the field, which produced 12,580BOPD at its peak, albeit penetrating only the first eight (8) metres of the reservoir. Tobias-14 penetrated a full Binga reservoir section of about 80 metres with identical zones encountered as in Tobias-13 and had oil shows throughout.  Tobias-14 drilling encountered highly fractured oolitic limestones in the reservoir with good primary porosity values in the range of 4 – 14%. Corcel believes that the porosity is enhanced by the extensive, naturally fractured carbonate system.  Initial pressure readings support Corcel’s predrill thesis that the reservoir has returned to its original pressure values through active recharge of the system.  Tobias-14 found no presence of water despite Tobias-4 watering out at the end of its production life. Corcel believes that this indicates the field has been fully re-equilibrated.

Tobias-14 and Tobias-13 Well Testing Programme

In a February 12, 2024 press release, Corcel announced that testing of Tobias-14 has formally begun. Delays in the start of the testing have been encountered over recent weeks primarily due to longer than expected timelines for deliveries of required testing equipment, combined with severe inclement weather at the well location, which included heavy rains and regional flooding.

Once completed, the Operator, Sonangol will then move the test equipment to the Tobias-13 well pad, which is already being prepared for testing, and will conduct flow testing on the Tobias-13 well.  Testing of both wells will determine formation pressures and ultimately the flow rates. Sonangol and Corcel believe the results will allow them to restart production via an early production system (EPS).

Various companies and oil industry analysts are closely watching the oil industry media for announcements on the Tobias wells testing programme.  If favorable results are achieved, then this would send out the message that there is positive life left in the other old oil fields in the Kwanza Basin.  This could start a stampede of companies exploring for oil in similar fields or focus on greenfield exploration.

It is evident that the investment community has high hopes for positive news from Tobias.  One year ago, Corcel’s share price was 0.25 British pence per share.  Their share price quadrupled to the current price of 1.0 pence.

 

Tako Koning is Holland-born and Canada-raised.  He has a B.Sc. in Geology from the University of Alberta and a B.A. in Economics from the University of Calgary.  He lives in his home city of Calgary, Canada.   During his long career in the Canadian oil industry, he also lived and worked in Indonesia from 1980 – 1986, Nigeria from 1992 – 1995, and Angola from 1995 – 2015. He was employed primarily by Texaco and also by Tullow Oil (Angola Block 1/06) and Gaffney, Cline & Associates. He has driven through most of the onshore Kwanza Basin and had the opportunity to study the basin’s outcrop geology as well as visit some of the abandoned oil fields including the Tobias, Galinda and Quenguela North.  He is pleased to share his knowledge in this article.  For the past 23 years, he has been a member of the International Advisory Board of Africa Oil + Gas Report (AOGR) since it was founded in 2001 in Lagos, Nigeria by Toyin Akinosho.


Angola Regulator Expects 16% Jump in Drilling Activity 

Angola National Oil, Gas and Biofuels Agency (ANPG) has announced that 43 oil wells are planned to be drilled in 2024, six more wells compared to the 37 wells drilled in 2023.

The agency lamented that the country is currently producing 1.1Million barrels daily, “quantities that would reach 1.2 million barrels of oil per day, if it weren’t for the daily losses of 90 thousand barrels of oil.

“In the last five years, the country recorded unplanned production losses of around 170Million barrels of oil, due to the aging of most of the concessions, designed to operate between 15 and 20 years, some already having existed for over 60 years”, said ANPG production director, Ana Rosa Miala.

“And our large installations such as Girassol and Dália are already more than 20 years old and this means that the systems in these installations have more failures, the failures are more recurrent. Regular preventive maintenance is no longer enough to mitigate these failures, greater effort and investment are required”, she explained.

To mitigate the sharp decline in production the agency said, “bidding for new concessions was resumed, and incentives were created for the continuous stay of the country’s old investors and the entry of new ones.

Paulino Jerónimo, the outgoing president of the board of directors of ANPG, told the press that the five-year-old regulatory agency had essentially grown in a period of tumult. Two of ANPG’s five years in existence were marked by the COVID-19 pandemic, which constituted “a great challenge” for the agency.

 

 


Africa and Latin America set to lead high-impact well drilling in 2024, eyeing rebound after poor 2023

By Rystad Energy

The upstream industry hopes 2024 can be a bounce-back year for high-impact oil and gas drilling after a lackluster 2023, with Africa and Latin America likely to spearhead activities. Rystad Energy has identified 36 potential high-impact wells to be drilled or spud in 2024, the highest annual total since we started tracking the market in 2015. This would be a sizeable jump from the 27 high-impact wells drilled last year, and operators will hope for a better success rate.

Of these 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.

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 1Billion barrels of oil equivalent (BOE), a sharp decline from the 3.5Billion BOE found in 2022. These high-impact wells accounted for 20% of the 5Billion BOE discovered by all exploration activities globally last year. To make matters worse, 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.

“Despite disappointing results in 2023, the exploration industry remains confident that fortunes can turn around this year. Drillers are still investing in frontier, emerging and play-opening areas to find volumes, but they are more targeted in their exploration strategies. Companies are deprioritizing any short-term pay-off in favor of multi-year plans and focusing on wells that best fit their long-term vision. This is a fundamental shift in the market and is unlikely to change even if 2024 success remains muted,” says Taiyab Zain Shariff, vice president of upstream research at Rystad Energy.

Learn more with Rystad Energy’s Upstream Solution.

Of the high-impact wells planned this year, 14 will be drilled in frontier and emerging basins, with three opening up new plays entirely. So, despite a disappointing 2023, many operators continue exploring new plays and focusing on frontier regions. 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. 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, since we started tracking these wells in 2015.

The oil and gas majors – BP, Chevron, Eni, ExxonMobil, Shell and TOTALEnergies – typically dominate high-impact well drilling, which will continue in 2024. 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 (NOCs) and internationally focused NOCs (INOCs) will account for eight (22%) of this year’s planned wells, with upstream operators responsible for 17% and smaller operators for the remainder.

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.

High-impact drilling in the Americas will be primarily focused on Latin America and dominated by wells that hold significance for each operator’s long-term goals rather than frontier basins. Only two of the 12 wells planned in the Americas are in North America, with one each in the US and Canada. In Latin America, a frontier well planned for offshore Argentina would be the first drilled well in the Argentine Basin. ExxonMobil also plans to drill a frontier well in the Orphan Basin offshore Canada.

A total of six high-impact wells are planned in Asia this year, including ultra-deepwater offshore drilling in Indonesia and Malaysia, the opening of India’s Andaman Basin and a potentially resource-rich well offshore China.

© 2024 Festac News Press Ltd..