Upstream companies are starting to adapt to an environment where oil prices will be higher for longer, one where OPEC+ production discipline and US shareholder returns are just as important a factor in drilling as the physical flow of oil.
Whilst 2022 witnessed several huge discoveries, most notably the frontier-opening Venus find offshore of the former German colony Namibia, the aggregate tally of new reserves is still a fraction of upstream activity back in 2014 and 2015.
Crudely put, we are still in a period of low upstream commitments, even if it’s getting marginally better than it was in peak Corona-virus times.
Buoyed by the likes of Venus, exploration activities are poised to bring us new surprises in 2023 and these top 5 exploration prospects are the most likely to shake up the market.
One of the most promising wildcats to be drilled this year has been in the making for quite some time and was first delayed by the ramifications of the Corona-virus and then by the shaky status of Russia’s Lukoil, a 50% partner in the joint venture.
Kazakhstan’s offshore area consists of several prolific fields, chief among them is the super-giant Kashagan field, however Zhenis is quite a different breed.
It is the southernmost Kazakh offshore block, straddling the maritime border with Turkmenistan, therefore carries a lot of risk to it but considering the prolific resources of both Kazakhstan and Azerbaijan.
The exploration drilling might also launch a new frontier basin that was overlooked. The studding of the first wildcat is already ongoing in water depths of 75-100 m some 80 km away from the Kazakh coast, and first results should be known in several months’ time.
The first ever deep-water wildcat drilled in Namibia’s offshore waters produced the largest oil discovery of 2022, with Venus establishing itself as a major find comparable to ExxonMobil’s 2015 Liza discovery.
Followed through with Shell’s Graff discovery in an exploration well drilled simultaneously to Venus, the next step will see other producers joining the hype and spud their contracted wells in other license blocks.
A French firm specializing in African upstream operations Maurel & Prom might be opening up another frontier in Namibia, exploiting the Aurora wildcat this year – further out in the sea (190 km from Walvis Bay) and in relatively shallower waters (1250 m).
Despite the differences, geologically Aurora should be similar to Venus, considering it is located in the license block just above TotalEnergies’ 2913B block, so in case the exploration well does hit commercial volumes of oil, it is going to be big.
Oil Price.com / ABC Flash Point News 2023.
Territories difficult to enter/invade with military forces, because the mountain wall covering for Russia, Kazakhstan, Iran, Georgia (Putin native land), Azerbaijan and so on.