Norway comes next, having offered 54 new licenses in its APA 2021 round, followed by India with 29 blocks under its OLAP Rounds 6 and 7, and Kazakhstan 11 blocks in its fourth oil and gas auction round.
Elsewhere, Egypt has issued rights to explore in nine blocks and Angola in two blocks. Uruguay’s offshore licensing round led to the awards of blocks OFF-2 and OFF-7 to Shell and Block OFF-6 to APA Corp.
But the overall number of newly licensed blocks and total acreage (320,000 sq km) are close to all-time lows, Rystad’s research shows, with only 21 lease rounds completed globally through August this year. That compares with 42 rounds held in the first eight months of 2021.
The consultant anticipates only two further lease rounds to come.
Global spending on exploration has fallen progressively as oil and gas companies focus more on their core producing assets and regions with guaranteed output, consolidating their business at a time of continued market uncertainty and the threat of a recession.
Also, many governments are pausing or halting leases and encouraging companies to complete exploration commitments within already awarded blocks, a trend that could continue as the switch to net zero becomes an increasing priority.
One example is the cancellation of the US Lease Sales 259 and 261 in the Gulf of Mexico and the Cook Inlet in Alaska.
“Oil and gas companies are unwilling to take on the increased risk associated with new exploration or exploration in environmentally or politically sensitive areas,” said Aatisha Mahajan, Rystad Energy’s vice president of upstream analysis.
09.08.2022
