A new report by Westwood Global Energy Group reveals a significant downturn in global high-impact well completions. According to their 2024 State of Exploration Report, completions fell by 21% in 2023, reaching the lowest level since data collection began in 2008.
However, despite the global slump, Namibia’s deepwater Orange Basin is a notable exception. Major oil discoveries have garnered significant industry attention, positioning the basin as a multi-billion barrel oil province. This rivals the largest discovery since Guyana-Suriname in 2015.
“Exploration continues to create value, with significant oil discoveries in the emerging deepwater Orange Basin plays in Namibia, coupled with faster developments, stimulating selective investment,” the report states.
This positive development comes even as global capital allocated to high-impact exploration drilling fell by 15% in 2023. This decline occurred despite oil prices reaching $100 a barrel the previous year and an over 20% increase in oil company capital spending in 2023.
Over the past five years, key themes in the industry include a decline in high-impact exploration performance, characterized by lower success rates, smaller discoveries, and higher finding costs in 2023.
“Only 3.3 billion barrels of oil equivalent (bnboe) of resources were discovered, and the commercial success rate dropped from 30% in 2022 to 23% in 2023, the lowest since 2018. Meanwhile, the mean discovery size decreased to approximately 220 million barrels of oil equivalent (mmboe), the smallest since 2014,” the report highlights.
This drop in performance is attributed to fewer giant discoveries and a reversion to the long-term average commercial success rate in frontier plays.
Westwood’s report also revealed that 68 companies participated in high-impact drilling in 2023, down from 99 companies in 2019 when 98 wells were drilled. QatarEnergy emerged as the most active explorer in 2023.
“Supermajors and National Oil Companies (NOCs) accounted for approximately 60% of high-impact well equity from 2019 to 2023. Eni discovered the most resources during this period, totaling 2.9 bnboe, while CNOOC achieved the highest commercial success rate at just under 50%,” the report noted.
Frontier exploration hit a record low in 2023, with only 15 wells completed and just one small discovery in the UK, underscoring the challenges and shifting dynamics in the global exploration landscape.
