High-Impact Drilling Will Resume in 2021: Rystad
One of the largely unrecognized impacts of measures taken over the past year to combat the Covid-19 pandemic has been a decline in the number of high-impact oil and gas wells drilled by the world’s majors and national oil companies.
In a February 5 research note, Norwegian consultancy Rystad Energy said its high-impact well (HIW) count fell to 27 in 2020 from 36 in 2019. But that reduced drilling, it said, turned out to be relatively successful – likely the result of operators high-grading their opportunities.
“The success rate rose to 41% from 32% in 2019 and pushed discovered volumes to 3.2bn barrels of oil-equivalent (boe), a four-year high,” Rystad said, adding that natural gas accounted for about two-thirds of the discovered resources.
Rystad expects high-impact drilling to recover in 2021, and has again produced a list of what it considers the top 30 high-impact wells to be drilled this year. Continuing a trend, Africa and Americas dominate the list, with 19 of the top 30 in North America (seven), South America (six) and Africa (six).
“With market conditions improving, we expect delayed wells to be moved through the pipeline along with new prospects,” Taiyab Zain Shariff, Rystad’s senior analyst, said. “This means high-impact activity could rebound to 2019 levels this year. The Americas region is likely to almost match last year’s number of high-impact wells, with Mexico as the driving force with five prospects.”
Majors operate 46% of the wells on the 2021 HIW list, with ExxonMobil’s Opal prospect offshore Brazil and Shell’s offshore plans in Mexico among the most highly-anticipated of the high-risk/high reward prospects. In Africa, French Total’s drilling at Ondjaba-1 in Angola and Venus in Namibia will also be watched closely.
The majority of the prospects on the 2021 list of high-impact drilling, Rystad says, are targeting large prospects which could “significantly increase” the addition of new volumes. “All in all, the pre-drill resource potential of this year’s top-30 lineup is estimated to surpass 13bn barrels of oil equivalent,” it says – a mark that could surpass the nearly 10bn boe discovered in the last four years.
A report by UK consultancy Westwood Energy last month said that the bulk of the high impact drilling this year would be in the Americas, with Suriname, Guyana, Brazil and Mexico among the likely successes. Africa by contrast would have another quiet year, for a mix of commercial, geological and political reasons.