The majority of the world’s top 30 high-impact oil wells will be drilled in North and South America and in Africa this year, according to Rystad Energy.
“These regions [the America and Africa] continue to be the hotspots for high-impact exploration, with 19 of the top 30 wells, seven in North America, six in South America and six in Africa,” the Oslo-based consultancy said in a new report.
Rystad classifies wells as high-impact after assessing a number of factors including the size of the prospects and their significance to the operator.
Major oil companies operate 46 per cent of the wells included in the list “showcasing their continued appetite to invest in high-risk, high-reward prospects”, it said. In total, 120 high-impact wells have been drilled globally over the past four years but only 50 have resulted in discoveries. The region with the highest concentration of high-impact wells since 2017 has been Northwest Europe with 22, of which 14 were drilled in Norway, six in the UK and two in Ireland.
The list includes ExxonMobil’s Opal prospect in Brazilian waters and Shell’s offshore drilling plans in Mexico. It also includes French oil company Total’s wells Ondjaba-1 in Angola and Venus in Namibia.
“A majority of this year’s expected high-impact wells are targeting large prospects which, if successful, could significantly increase the new recoverable volumes of 2021,” Rystad Energy said. “All in all, the pre-drill resource potential of this year’s top-30 line-up is estimated to surpass 13 billion barrels of oil equivalent.”
Drilling of high-impact oil and gas wells was affected last year due to the global pandemic, but “overall results were nevertheless positive”, according to Rystad. The success rate rose to 41 per cent in 2020 from 32 per cent the year before and pushed discovered volumes to 3.2 billion barrels of oil equivalent, a four-year high.
A total of 35 high-impact wells were originally planned for 2020. Out of these, 16 were delayed until 2021 or beyond and six were shelved, according to the report.
“With market conditions improving, we expect delayed wells to be moved through the pipeline along with new prospects,” Taiyab Zain Shariff, senior analyst at Rystad Energy, 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.”
Oil prices have recovered in the last few weeks, thanks to production curbs by Opec and its allies. Saudi Arabia also announced a surprise unilateral one million barrels per day production cut in February and March to support oil markets.
Brent, the international oil benchmark, was up 0.85 per cent per barrel at the end of the week on Friday to $59.34, while West Texas Intermediate (WTI), the gauge for US oil, closed up 1.1 per cent to $56.85 per barrel.