Page 34: of Offshore Engineer Magazine (Nov/Dec 2019)

Exploration Outlook

Read this page in Pdf, Flash or Html5 edition of Nov/Dec 2019 Offshore Engineer Magazine

FEATURE Exploration “Gas discoveries have edged out oil discoveries in 2019 with gas to liquids ratio of 65:35 in YTD offshore discov- ered volumes. Excluding Americas, gas discoveries domi- 2020 nated oil discoveries in all other regions. The trend is esti- mated to continue in 2020 with growing demand for gas across geographies, led by Asia and Middle East.”

Offshore

Overall, Patel anticipates offshore exploration activity will continue its upward trajectory in the year ahead. “We can expect to see a moderate rise of 4-7% in 2020 com- pared to 2019,” he said.

Exploration

Licensing activity, too, has been on the rise. “2019 wit- nessed high levels of licensing activity compared to last sev- eral years, driven by stability in oil prices and more attractive

Outlook of ? scal terms offered by countries in a bid to improve on domestic exploration investments. Subsequently, offshore

By Eric Haun acreages awarded YTD are up more than 25% compared to 2018, which is encouraging as the commitments and work programs associated with these awards are expected to drive xploration and production (E&P) com- investments in offshore exploration in near term.” panies are expected to enter 2020 with “Growth in licensing activity seen in 2019 is expected in measured optimism for offshore explo- continue in 2020,” Patel said. “2020 will continue to wit- ration prospects, after 2019 delivered a ness momentum in licensing activities with more than 50

E moderate increase in exploration drilling and licensing rounds to be conducted across the globe.” not-so-moderate rise in licensing activity. Patel said Africa will see the highest increase in licensing activity, with several smaller countries in Southeast Asia (Myanmar, Thailand, Timor-Leste and Bangladesh) and

RISING FROM THE ASHES

When the oil price began its nosedive in 2014, offshore ex- the Americas (Guyana, Barbados and Panama) also active ploration activity spiked in parallel, falling nearly 40% before in licensing arena in 2020.

bottoming out in 2016-2017, said Rohit Patel, a senior ana- lyst at Rystad Energy. In unison, offshore exploration expen-

DISAPPOINTMENTS AND OPPORTUNITIES diture dropped by almost 60% from 2014 to 2017 mainly “After many years, operators in Northwest Europe, Af- due to lower cash? ows, the growth of US shale and reduction rica and Asia Paci? c were seen exploring actively in frontier in offshore acreage awarded, Patel said. “This also resulted in regions in 2019. The continued bene? ts of higher cash- a drop in conventional discovered resources, and the reserves ? ows, ef? ciency gains and cost reductions are expected to replacement of E&P companies fell below 20%.” encourage operators to run high risk frontier exploration

But then came 2018, “the year of transition”, which campaigns in 2020,” Patel said.

brought the ? rst uptick in global offshore exploration well

That’s not to say there haven’t been letdowns. “2019 has count since the start of the downturn, leading to expecta- continued the theme of peaks and troughs,” said Gregory tions that 2019 would deliver “a much-needed resurgence” Brown, Associate Director - Offshore at Maritime Strate- in offshore exploration, Patel said.

gies International Ltd. “While there has been some partic-

For the most part, 2019 has delivered. As of Novem- ularly encouraging green? eld discoveries such as Yakaar-2 ber, Patel pointed to an 8-10% increase in the number of off Senegal and ExxonMobil’s continued success off Guy- offshore exploration wells drilled compared to 2018. “In ana, activity in other frontier regions such as the Barents line with this, global discoveries of conventional oil and Sea has disappointed.” gas have also shown a promising growth in 2019 with the

Looking ahead to 2020, Brown said the number of con- total offshore discovered resources YTD reaching almost tracted rigs suggests “activity will increase, but the magni- 8.5 billion boe (vs 2018 total volumes of 7.5 billion boe).” tude may disappoint some of the more bullish outlooks. 34 OFFSHORE ENGINEER OEDIGITAL.COM

Offshore Engineer