We start the year off with our review of 2020 high impact exploration activity, and a look into key wells to watch for 2021, summarised by Westwood's Head of Global Exploration & Appraisal, Graeme Bagley.
Westwood’s analysis of 3 E&P peer groups – the five Supermajors, four selected National Oil Companies (“NOCs”) and 17 selected US Shale producers, suggests that 2021 capital expenditures are likely to remain relatively flat or decrease slightly compared to 2020, at a US$50/bbl Brent (US$45/bbl WTI) oil price assumption.
After a turbulent 2020 for the oil and gas industry, 2021 is expected to see a modest rise in investment in the UK and Norway offshore sectors, assuming a US$50 per barrel average oil price. Exploration activity could recover to 2019 levels and investment in new developments is set to increase.
With the Energy Transition gaining pace, several Exploration and Production (“E&P”) companies have adjusted their business models; both to reduce emissions and to mitigate climate-related business risks.
This oil and gas, potentially, worth more than $65 bn and costing an estimated $24bn to discover, represents 40% of the volume found in high impact discoveries in the period. Where is this resource located? Why is it stranded and how big an opportunity does it represent?
Westwood Global Energy Group has appointed David Linden to the newly-created role of Head of Energy Transition. The announcement comes as the company commits to helping the energy industry successfully navigate decarbonisation.
The report covers the historic period of 2014-2019, wherein the land drilling rig market was severely impacted by the reduction in drilling activity seen during the previous downturn, particularly in the North American market.
Graeme Bagley presents presents the results of a study of over 500 wells drilled since 2008 with DHIs reported pre-drill and compares actual success rates against global exploration benchmarks for all wells.
Significant cost reductions have improved E&P cashflows and should drive increased offshore tendering activity in 2020. Pricing is expected to remain competitive, however, and contractors will need to remain focussed on profitability.