Consultant identifies six high-impact wells to watch
Latin American offshore plays will account for one-third of the large prospects due to be drilled globally this year, according to Wood Mackenzie.
LONDON – Latin American offshore plays will account for one-third of the large prospects due to be drilled globally this year, according to Wood Mackenzie.
Potentially giant reservoirs off Brazil, Guyana, and Mexico will attract the highest investment.
Dr Andrew Latham, vp, Global Exploration at Wood Mackenzie, said: “We expect billion-barrel scale volumes from these emerging and newly-proven plays, as has been the case in the last couple of years.
“Worldwide, we expect 2019 discoveries to add around 15-20 Bboe of new resource.”
Dr Latham singled out six wells headed by Peroba, a presalt structure in Brazil’s Santos basin and on trend with the deepwater Lula field. In-place volumes could exceed 5 Bboe. Petrobras, BP, and CNODC are the partners.
Total is already drilling Brulpadda-1, in South Africa’s deepwater frontier Outeniqua basin, targeting a potential 1 Bboe.
Eni’s shallow-water Nour-1 (a potential 860 MMboe) in Egypt’s Nile Delta is also drilling, and a success here could impact other projects in the region as its near-shore location means it could be brought onstream quickly, strengthening Egypt’s gas export prospects.
Next month Chevron is due to spud Kingsholm-1 in the Mississippi Canyon area of the Gulf of Mexico. This is a high-pressure/high-temperature (20 ksi) prospect with estimated reserves of 300 MMboe.
Tullow and partners will drill the 200-MMboe Jethro prospect later this year on the Orinduik block, offshore Guyana, in the same play as ExxonMobil’s recent Hammerhead find.
Total’s Venus-1 well in Namibia’s ultra-deep offshore will target 2 Bbbl of oil in a giant Cretaceous fan play, close to the South African maritime boundary.
However, although exploration economics have improved over the past two years, companies are drilling fewer wells, and many have reduced their exploration spend.
“Even as average exploration returns rise to double digits, newcomers will be few and far between,” Dr Latham warned.
Nevertheless, exploration remains critical for the majors, he said, and a small number of independent IOCs and international NOCs will also be working on high-impact prospects.”
“A stronger oil price, lower cost base, refocused portfolios and greater drilling success in 2017-2018, and a healthy inventory of new quality acreage have cheered up the industry. It is using more efficient rigs at lower rates, and avoiding technical complexity.
“These changes will help the industry stay on track and continue to be profitable. However, this more upbeat spirit has been hard-won and companies will be loath to give it away.
“Purse strings are not about to burst open. We expect companies will focus on their best prospects, with global exploration and appraisal spending for 2019 staying close to its 2018 level of just under $40 billion per year.”
Support from governments worldwide has been variable, he pointed out. While some have adjusted their fiscal and regulatory regimes to encourage exploration, others (notably New Zealand) have opted to ban exploration.
Dr Latham said: “Sustainable energy technologies are advancing and public attitudes towards oil and gas exploration are changing, too. As a result, we foresee more partial or complete exploration bans.
“However, so far this is a trend for economies that can afford a declining hydrocarbon contribution in their energy mix. The industry will be watching closely to see if such bans spread to countries with greater subsurface potential.”