Global oil and gas exploration spend hits record highs

31st January 2023

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia


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PERTH ( – New data by advisory firm Wood Mackenzie (WoodMac) has shown that 2022 was the strongest year in more than a decade for global oil and gas exploration, led by major discoveries in Namibia, Brazil and Algeria.

WoodMac reported that the sector created at least $33-billion of value and achieved full-cycle returns of 22%, at $60/bl Brent prices.

In its 'Oil and gas exploration: 2022 in review’ report, WoodMac found that exploration well numbers were less than half the numbers during pre-pandemic years, yet the total volume of 20-billion barrels of oil equivalent matched the average annual volumes of 2013-2019.

“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,” WoodMac director of global exploration research Julie Wilson said.

“The highest value came from world-class discoveries in a new deep-water 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,” said Wilson.

“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 one-million barrels per day in oil and 0.5-million barrels of equivalent per day gas production, generating $15-billion in free cash flow.”

The report also found that the exploration sector continued to be dominated by national oil companies (NOCs) and majors, with TotalEnergies, QatarEnergy and Petrobras leading the way in net-new discovered resources in 2022. In total, NOCs and majors accounted for almost three-quarters of new resources discovered.

“Overall, we saw a year of continued discipline from explorers with exploration and appraisal well numbers largely flat from 2021. However, spend per well increased due to inflationary pressures. Appraisal well numbers increased as companies push towards final investment decisions in this short-term window of opportunity,” Wilson said.

Edited by Creamer Media Reporter


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