Offshore staff
LONDON – Exploration well numbers this year could be 35% down on 2019 levels, according to Westwood Global Energy Group.
At the start of the year the consultant expected a total on a par with or slightly above the 93 wells completed in 2019. But ~60-70 high impact exploration wells completed by the end of 2020 now seems more realistic, said Kai Gruschwitz, senior analyst, Global E&A, which would be back down to numbers last seen from 2016 to 2018 following the 2014 price crash.
The 26 ‘high-impact’ wells completed so far this year have discovered a total of around 2.1 Bboe and according to Westwood, wells currently drilling are testing a further 2.5 Bboe of risked volumes.
One of the higher-profile wells in progress is on BP’s Shafag Asiman gas prospect in the Azeri sector of the Caspian Sea, with roughly 4.3 Bboe targeted from remaining wells due to spud this year.
Westwood now expects discovered volumes for 2020 to total 6-9 Bboe, compared with the 15 Bboe added last year worldwide.
But in the current climate a firm rig contract is no guarantee of a well being drilled, Gruschwitz pointed out. For example, CNOOC’s planned Pelles A-71 well in the Flemish Pass basin offshore Newfoundland has been postponed due to COVID-19 concerns, as has Aker BP’s wildcat on the Stangnestind prospect in the Norwegian Barents Sea.
Contracts are undergoing close scrutiny with some operators triggering force majeure clauses.
North America (including Mexico) will likely to take the biggest hit, although this region still looks set to for the largest number of wells.
Elsewhere, few high-impact wells look likely in the eastern Mediterranean this year, while only three to five wells in this category may go ahead in Sub-Saharan Africa.
Drilling plans in the central North Sea, offshore Guyana and Suriname and the shallow water Bay of Campeche area in Mexico will probably be less affected, although the coronavirus may still restrict operations even where companies are keenest to drill.
However, the fact that wells are going ahead shows that exploration may be down in 2020 but is not out.
04/21/2020
