East Africa also boasted success

Surprise! North America Grabbed the Spotlight

American Association of Petroleum Geologists (AAPG)
North America led the way, but the entire world made 2012 a memorable year. Above, the Sakhalin II offshore platform, Russia.Photo courtesy of Shell
North America led the way, but the entire world made 2012 a memorable year. Above, the Sakhalin II offshore platform, Russia.Photo courtesy of Shell

Who would have expected to see North America and east Africa at the top of an article about global E&P developments?

The shocking resurgence of oil production in North America was 2012’s leading energy story. Tight oil development, oil sands production in Canada and continued discoveries in the U.S. sector of the Gulf of Mexico all contributed to the boom.

Last year, deepwater discoveries on the Mexican side of the Gulf added a new angle.

In August, Mexico released preliminary information about a 350-million-barrel oil discovery in the Perdido Fold Belt. The Pemex Trion-1 well was drilled to 16,115 feet in 8,200 feet of water, about 110 miles from the Tamaulipas coast and 24 miles south of U.S. waters.

Officials said the discovery found about 1,050 feet (320 meters) of saturated oil pay with 18-25 percent porosity and as much as 250 md of permeability – enough for an estimated flow rate of up to 10,000 barrels per day.

Announcement of another significant discovery offshore Mexico followed just three months later, with news of the 125 million-barrel Supremo discovery for Pemex about 155 miles east of Matamoros. All reserve numbers are “3P” – proven, probable and possible.

The Supremo well, one of the deepest in the Gulf, was drilled in more than 9,500 feet of water.

Out of Africa

On the other side of the world, discoveries offshore Tanzania, Kenya and Mozambique turned the western Indian Ocean into an industry hot spot last year. Most of the new fields produced natural gas, with 80 trillion to 100 trillion cubic feet (Tcf) of gas in place, according to operator estimates.

Statoil and partner ExxonMobil reported a large offshore natural gas discovery with the Zafarani well in Tanzania’s Block 2 license area, posting a preliminary resource estimate of 5 Tcf gas in place.

Zafarani was drilled in 8,470 feet of water to a total depth of about 16,700 feet, and encountered more than 390 feet of high-quality pay, Statoil announced.

That find was followed quickly by a second Statoil discovery just 10 miles away in Block 2, the Lavani well drilled in 7,875 feet of water. Lavani encountered over 300 feet of excellent quality reservoir sandstone, with a resource estimate of 3 Tcf, the company said.

Drilling offshore east Africa brought a string of successes in 2012 for a number of other operators, including ENI, BG plc, Tullow Oil and Anadarko Petroleum.

In June, Anadarko announced that its Atum exploration well offshore Mozambique, in Offshore Area 1 of the Rovuma Basin, found more than 300 net feet of gas pay in two high-quality Oligocene fan systems. The Atum well was drilled to a total depth of 12,665 feet in water depths of about 3,285 feet.

A gas complex containing Atum and the previous Golfinho discovery located about 10 miles to the northwest could hold 10 to 30-plus Tcf of recoverable natural gas resources, the company projected.

ENI also reported notable east African exploration discoveries, mainly in Offshore Area 4 off Mozambique. Its Mamba North East-2 gas field discovery, in high-quality Oligocene, Eocene and Paleocene sands, added 10-plus Tcf to the area’s production potential, the company said. 

North American Impact
Steve Trammel
Steve Trammel

North America’s much-improved oil and liquids outlook has global implications, according to Steve Trammel, research director and adviser-energy for IHS CERA in Englewood, Colo.

“It’s staggering, really, what we’re seeing here,” Trammel said.

A recent IHS tight oil study covered 27 producing areas in the United States and Canada, he noted.

“We’ve just confirmed 47 billion barrels of economically recoverable oil and condensate,” Trammel said.

“From where we are now, we’re going to add five million barrels a day in the U.S. and Canada, and that’s not counting the oil sands in Canada,” he added.

The study identified 39 billion barrels in contained natural gas liquids, and “if we talk about the dry gas associated with tight oil, there’s 277 Tcf over the next 25 years,” Trammel said.

He projected production of recoverable gas liquids and condensates to increase as much as four million barrels per day by 2021.

“If you add all that together, the total production increase could be 11 million barrels of oil equivalent (boe) per day,” Trammel noted.

“We’re really talking that North America could become energy self-sufficient over that timeframe. That’s going to generate a whole global rebalance of supply,” he said.

New finds within known producing areas are an intriguing feature of the North American tight oil picture: “Discoveries in known plays are the future,” Trammel observed.

He said controlling costs will be critical for the industry, but the outlook for North American development remains highly positive. IHS projects “94 percent of these liquid resources could be produced at a price of $90 per boe, and about 65 percent can be produced at $60 per boe,” Trammel said.

“Petrochemicals is going to be huge, too, because we have so much feedstock in the U.S. It’s an amazing turnaround, what’s happened,” he said.

Without the big gas wells offshore east Africa, the industry would have seen declining natural gas discovery numbers around the world, said AAPG member Leta Smith, director, oil and gas supply for IHS in Houston. IHS projects 60 Tcf of recoverable gas from the recent exploration work in that area.

“It’s all in the deep water, and of course the challenge is, ‘How are you going to develop it?’ We think it will be mostly LNG,” she said.

Successful exploration off east Africa indicates “there’s a lot more gas out there to be found” by deepwater drilling, Smith noted.

“In the past, companies weren’t looking for gas offshore,” she said. “It has been amazing how much gas has been found in deep water.”

By contrast, the industry has seen slower success in international oil exploration in recent years, Smith added.

“One thing that’s kind of interesting in crude oil is, discoveries of crude oil outside North America have been declining since 2010,” she said. “We’ve seen declining licensing, as well.”

She thinks higher oil prices are making work in older oil fields more attractive, possibly diverting interest away from new exploration projects in higher-risk areas of the world.

“The implications are that we may have seen declining oil exploration, but that will turn around once they run out of older fields to develop,” she said. 

In other areas of global exploration:


Cobalt International Energy announced results in early 2012 from a subsalt oil discovery in Block 21 offshore Angola. Its Cameia-1 well was drilled in 5,518 feet of water to a total depth of 16,030 feet. Wireline evaluation confirmed a 1,180-foot gross continuous oil column with a more than 75 percent net-to-gross pay estimate.

The company’s Cameia-2 follow-up became one of the world’s most closely watched confirmation and delineation attempts.

In July, Cobalt said the second well reached basement at almost 18,000 feet. Log results confirmed the presence of a large hydrocarbon accumulation and confirmed lowest-known oil at least 440 feet deeper than observed in Cameia-1. 


Several discoveries and extensions broadened the potential of the Kurdistan Region of northern Iraq. DNO International of Norway said its Tawke-16 well flowed at a cumulative rate of more than 25,000 barrels per day from multiple, independently tested zones.

Tawke-16 was designed to appraise the undrilled northern flank of the Tawke field, DNO said. The well reached total depth of 7,770 feet and found over 1,150 feet of gross continuous oil column in the Cretaceous.

Later in the year, London-based independent Afren announced that the Hunt Oil-operated Simrit-2 exploration well encountered more than 1,500 feet of net oil pay after drilling to 12,467 feet in the Ain Sifni PSC. Three drill stem tests at separate zones within the Triassic Kurra Chine formation yielded an aggregate flow rate of 13,584 barrels of oil per day, Afren said.

South America

Drilling in the Llanos Basin of Colombia primarily targeted crude, with several discoveries disclosed during 2012.

CEPSA and Gran Tierra Energy’s Ramiriqui-1 oil exploration well in Llanos-22 Block, in the Andean foothills trend, was drilled to 19,519 feet measured depth. The Mirador formation produced initial natural flow rates of up to 2,525 barrels of oil per day. Total flow rates were restricted because of gas flaring limitations.

Industry interest grew sharply in the Vaca Muerta or Dead Cow shale play in Argentina. Observers have compared the Vaca Muerta’s potential to the Eagle Ford play in the United States.

In late November, Americas Petrogas, Calgary, said the Los Toldos Este LTE.x-1 vertical well intersected the Vaca Muerta formation between 9,170-10,060 feet. After stimulation and clean-up, initial production reached 797 boe/day with 694 barrels of light sweet crude, it said. The initial 30-day average flow was 309 boe/day.

Other regions

Pakistan continued to be a promising gas province. OMV completed the K-30 exploratory well on the Kadanwari block in the Middle Indus basin, which tested at 52 million standard cubic feet (scf) per day on choke.

Eni said the Badhra B North-1 exploratory well in the Khirtar Fold Belt region was drilled to 8,038 feet and found 177 feet of net gas pay in two thick Cretaceous sandstones of the Mughal Kot formation. The well flowed at 25 million scf/day and 35 million scf/day from the two sands. 

Oil discoveries kept piling up offshore Brazil. 

Drilling pushed production northward on the Norwegian Shelf in the North Sea.

Wintershall Norge said it found light oil with its Skarfjell prospect wildcat in PL 418 offshore Norway. Statoil and partners confirmed Skrugard and Havis prospect finds in the Barents Sea, with reserves of 400-600 million barrels of recoverable oil, and claimed the most northerly development on the shelf to date.

After a period of declining production, Smith says IHS now expects to see a small increase in North Sea oil production in the 2016-17 timeframe. 

Multiple companies announced development and extension plans for recent crude discoveries. In an old story, a world that is supposed to be running out of oil keeps running into it.

“The Peak Oil guys are pretty quiet now,” Trammel observed, “thanks to the creativity and innovation of the industry.”

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