For all the prevailing expressed concerns over likely global oil supply challenges, going forward, a succession of new discoveries made 2022 the highest value year for almost a decade according to a January 2023 report published by Rigzone.
The report has identified new oil and gas discoveries as being responsible for having driven exploration to its highest value creation in more than a decade, and has cited major oil and gas discoveries in Brazil, Algeria and Namibia as being primarily responsible for the phenomenon. During last year, the sector created at least $33 billion of value according to a recent report from the Energy Research and Consultancy Company, Wood Mackenzie. “2022 was a standout year for exploration.
Volumes were good, but not stellar. However, explorers were able to drive very high value through strategic selection and focusing on the best and largest prospects. The discoveries bring higher-quality hydrocarbons into companies’ portfolios, allowing them to reduce carbon by displacing less advantaged oil and gas supplies while also meeting the world’s energy needs,” Wood McKenzie Director of Global Exploration Julie Wilson is quoted in the Rigzone report as saying. “The highest value came from world-class discoveries in a new deepwater play in Namibia, as well as resource additions in Algeria and several new deepwater discoveries in Guyana and Brazil, where the latest wave of pre-salt exploration finally met with success. The average discovery last year was over 150 million barrels of oil equivalent, more than double the average of the previous decade. Liquids accounted for 60% of new resources discovered, according to the report. This is only the third time in 20 years that liquids made up the majority of new discoveries.
“There is a lot of uncertainty in future long-term demand scenarios for oil. Explorers are accelerating oil exploration to meet near and mid-term demand, while gas exploration was focused in geographies that can supply the gas-hungry European market. In some cases, major leases are approaching expiration of the exploration term and companies are pushing to optimize their value. By 2030, fast-tracked development of these new discoveries could deliver 1 million barrels per day in oil and 0.5 million barrels of equivalent per day gas production, generating $15 billion in free cash flow,” Wilson is quoted in the Rigzone report as saying.
