Nigeria Records 296 Million boe in First Six Months of 2023 – Research
Nigeria recorded 296 million barrels of oil equivalent (boe) in discovered volumes, in the first six months of this year, Rystad Energy research has shown.
Nigeria trailed Guyana, which recorded 603 million boe and Turkey, which sits second with 380 million boe, but ahead of Namibia that recorded 287 million boe during the period under review.
“Offshore discoveries are spread relatively evenly between ultra-deepwater, deepwater and shelf finds.
However, we expect increased activity in the remainder of 2023, especially in the ultra-deepwater market, with projected growth of 27 percent versus 2022 in terms of spud wells”. Rystad said.
According to Rystad, its research shows that 31 high-impact wells – designated using its tiering system based on the project’s significance and production potential – are expected to be drilled this year.
“So far, 13 have been completed, six are ongoing and 12 remain in the pipeline. Only four of the 13 completed wells encountered hydrocarbons, a measly 31% success rate.
The results of three wells are not yet disclosed, while the remaining six failed to find any reserves. These failures significantly impact the total discovered resources and greatly contribute to the falling discoveries”,Rystad said.
Spending Expected to Top $50 billion this Year
There is growing spending on conventional oil and gas exploration and is expected to top $50 billion this year, the highest since 2019.
However, operators are still waiting for the results they had hoped for, the research shows, adding that despite the rising investments, discovered volumes are falling to new lows.
Rystad’s estimates show that in the first half of this year, explorers found 2.6 billion boe. This is 42 percent lower than the first half of 2022 total of 4.5 billion boe.
“Fifty-five discoveries have been made, compared to 80 in the first six months of last year. This means discoveries in 2023 have averaged 47 million boe, lower than the 56 million boe per discovery for the same period in 2022,” Rystad said.
Rystad explained that the exploration and production (E&P) industry is in a transitionary period, with many companies exercising increased caution and shifting their strategies to target more profitable and geologically better-understood regions.
This strategic shift and the failure of several critical high-potential wells, it said, are contributing to the precipitous drop.
In the hunt for new resources, Rystad said exploration companies are prioritizing the offshore sector, trying to capitalize on underexplored or frontier areas to unlock new volumes through high-risk, higher-cost offshore developments.
According to Rystad, the offshore industry accounted for about 95 percent of exploration spending this year to date but only about two-thirds of discovered volumes.
“Upstream companies are facing a period of uncertainty. They are eager to capitalize on the increased demand for fossil fuels and find additional resources, but recent results have been lackluster.
If exploration efforts continue to yield unimpressive results for the remainder of the year, 2023 could be a record-breaker for the wrong reasons," Aatisha Mahajan, vice president of upstream research at Rystad.
Majors to continue playing active role in exploration
Rystad stated that six majors – ExxonMobil, BP, Shell, TotalEnergies, Eni and Chevron, will continue to play a critical role in global exploration, with a prominent share of exploration spending and global conventional discovered volumes.
It revealed that the six companies are expected to spend about $7 billion this year on exploration, about 10 percent higher than in 2022.
Rystad also informed that exploration activity will likely gain momentum in the second half of 2023, with crucial exploration wells planned to be drilled.
“Our forecasts show that the majors will contribute about 14 percent of total global exploration spending in the coming months, highlighting their relative significance in an environment where exploration has pivoted to the offshore sector, with an increased focus on frontier regions.
These underexplored or virgin regions hold some of the most technically prospective yet-to-be-drilled prospects, with majors playing a vital role in recent years in exploring these areas.
“The spending and activity profiles of the majors position them firmly in the market, but national oil companies (NOC) have the most extensive subsurface resource base at their collective disposal.
More than half of the projected exploration spending in 2023 will come from NOCs and NOCs with international portfolios (INOC).”
“However, there may yet be some success to come this year, as only 30 percent of anticipated wells have been completed, highlighting the magnitude of the remaining activity. Only 23 of the remaining 56 exploration wells are either drilled or are expected to be drilled this year, meaning about 60 percent are likely to be drilled or postponed until 2024. So, even if 2023 proves unsuccessful, a rebound could be on the cards next year”, it added.
