OSLO, Norway – This year delivered a record low in terms of newly discovered conventional hydrocarbons, according to Rystad Energy.
Total volumes proven globally in this category were less than 7 Bboe, Rystad claimed.
“We haven’t seen anything like this since the 1940s,” said senior analyst Sonia Mladá Passos. “The discovered volumes averaged at ~550 MMboe per month.
“The most worrisome is the fact that the reserve replacement ratio in the current year reached only 11% (for oil and gas combined) - compared to over 50% in 2012.”
According to Rystad’s analysis, 2006 was the last occasion when reserve replacement ratio reached 100%, due mainly to the giant Galkynysh gas field onshore Turkmenistan.
This year’s average offshore discovery contained around 100 MMboe, against 150 MMboe in 2012.
“Low resources per discovered field can influence its commerciality,” Passos said. “Under our current base case price scenario, we estimate that over 1 Bboe discovered during 2017 might never be developed.”
Top three countries in terms of discovered volumes in 2017 were the mainly offshore provinces of Senegal, Mexico andGuyana.
Off Senegal, Kosmos Energy discovered theYakaar gas field, and this, coupled with the 2016 Teranga find, will provide the basis for a large LNG development in future.
Mexico delivered the Zama and Ixachi discoveries and various smaller finds, adding around 1 Bboe to the country’s recoverable resources. Zama was also the country’s first discovery by a private company –Talos Energy – in the past 80 years.
Offshore Guyana, ExxonMobil added s further 1 Bboe of recoverable resources to its pool in the Stabroek block through the Payara, Turbot and Snoek discoveries.
One of the disappointments was Kosmos’ recently P&A’d ultra-deepwater wellLamantin off Mauritania, where large prospective resources were anticipated.
Another high-impact well, Erin Energy’s Oyo Northwest, is currently drilling offshore Nigeria, which has a pre-drill estimate of more than 1 Bboe.
“While there have been some notable successes this year, we have to face the fact that the low discovered volumes on global level represent a serious threat to the supply levels some 10 years down the road,” Passos claimed.
“Global exploration expenditures have decreased year-over-year for three consecutive years now, falling by over 60% from 2014 to 2017. We need to see a turnaround in this trend if a significant supply deficit is to be avoided in the future.”