2010 Discoveries
It would appear the industry has emerged strongly from the recession problems of the previous year, with 2010 seeing a determined move into unconventionals, new and exciting plays emerging – particularly off East Africa – multi-billion dollar deals being plentiful with national oil companies once again setting the pace, and mega reserves once again confirmed off the coast of Brazil.
Yet, despite all the positives, 2010 is most likely to be remembered for the disastrous Macondo blow-out in the Gulf of Mexico and the implications this raised for all sectors of the industry, probably for many years to come.
Oil prices proved less volatile than the previous year, remaining more or less within the desired OPEC range, which helped major global projects advance as capital expenditures improved.
For the industry, one of the more important positives to emerge in 2010 is that success rates have improved from 37 percent in 2009 to 41percent, the result of technical advancements, the more focused allocation of budgets (a hangover from the previous recession year) and, in some cases, significant wildcat success.
Around the World
Of the top ten listing of discoveries ranked in each region by Bboe of oil and gas, five were in Brazil. But Petrobras did not have it all its own way though, with OGX Petroleo e Gas Ltda. accounting for three of these.
Nonetheless, it is Petrobras that claims the honors for the year’s biggest find – its Libra discovery in the Santos Basin eclipsing all others by a significant margin.
The promise of East Africa finally came good with Anadarko making two potentially world-class discoveries in the deepwater Ruvuma Basin, and the company is already hinting at LNG possibilities.
Elsewhere in Africa, Pluspetrol made its first oil discovery in Angola (Castanha 1) while Petronas enjoyed success in Ethiopia (Genale B2X).
The remaining three 2010 top ten discoveries confirmed the emergence of central Asia, as these comprised one each in Azerbaijan, Iran and Turkmenistan.
The Iranian success proved frustrating, as it underlined the huge potential the country has but it comes at a time when the sanctions screw was turned harder – resulting in a mass withdrawal of international oil companies and service companies – while the engineering arm of the Revolutionary Guard pulled out of developing all phases of the South Pars gas field.
Another notable success was Cairn’s T8-1 wildcat offshore West Greenland – and although this was abandoned as a non-commercial gas discovery, it caused great excitement as it encountered gas in thin sands above the main objective, offering proof of a working hydrocarbon system in Baffin Bay.
Within unconventional operations, coalbed methane came to the fore with potentially commercial finds in two of the most prospective regions, Australia and China.
Looking Deeper
The 390 total discoveries recorded through November 2010 were almost equal to the number of discoveries reported through November 2009, but two factors uniquely characterize 2010 successes:
The offshore dominates the discovery volumes, accounting for almost 89 percent of the 27.6 Bboe discovered to year-to-date.
This substantially exceeds the 76 percent of reserves contributed by offshore discoveries from 2005 through 2009.
2010 oil discovery volumes already exceed those reported in any of the prior six years.
Brazil’s deepwater oil discoveries accounted for most of the 2010 oil reserve additions reported year-to-date.
If there was a disappointment it may be that a couple of important wells failed in the Barents Sea, an outcome made all the more significant, perhaps, given that Norway and Russia finally signed a preliminary deal over their disputed Barents Sea border, paving the way for a final delineation of a maritime area believed to be rich in hydrocarbons.
Also the termination of deepwater drilling in the Gulf of Mexico following the Macondo incident has resulted in the region hosting only seven finds – and as these were in the first five months of 2010, the region was otherwise primed to enjoy a bumper year.