Exploration Poised to Increase in 2023 “Let’s go Elephant Hunting”
Operators are increasing exploration activity following several years of underinvestment and in search of the next elephant/ large discovery to restore production capacity that has declined in recent years. Large discoveries in Guyana, Suriname, Brazil, and Africa have piqued interest among operators during this period of elevated oil prices to step out and increase exploration.
In recently published reports by Kimberlite Research, operators report that approximately 26% of wells drilled offshore in 2023 will be aimed at exploration and 34% of land wells drilled internationally. This is a significant increase from prior years and impacts the OFS community as the demand for higher-end drilling and evaluation services and technologies will be required to fully evaluate these wells.
Also, as previously reported, with a tightening market for qualified oilfield equipment and experienced personnel, the majors and NOCs are now focused on securing the best equipment, technology, and services to meet their investment growth objectives. This has resulted in the signing of longer-term contracts with higher pricing levels for drilling rigs, equipment, and services.
Oil and gas demand will continue to increase over the next twenty years and additional investment in the oil & gas industry will be required to meet the global demand including exploration as operators seek long-life reserves capable of meeting the world’s needs for decades to come. Current policy and regulatory environment support higher oil prices while capital discipline among the operators and OFS suppliers will maintain a sustainable and profitable environment for investors.
Kimberlite will continue to track the future expenditure plans among the operators worldwide and report updates. Feel free to reach out to discuss.