There’s less appetite for exploration drilling, according to Rystad Energy.
“Of the 100,000 wells drilled globally in 2013, four percent were exploration or appraisal wells. In 2018, this share is expected to drop to only two percent of the 70,000 wells drilled,” Rystad said in a company statement published on its website.
“This trend can be observed across both the offshore and the onshore markets and across the globe,” Rystad added.
In the offshore, market share of exploration wells has changed from 38 percent in 2013 to 24 percent in 2018, according to Rystad.
“We’ve seen the most significant drop in South America as the Brazilian exploration market dried up during the downturn,” Rystad said.
“The onshore market has seen even a bigger reduction. The share of exploration wells dropped from three percent [in 2012] to 1.3 percent [in 2018] due to drastic cuts in North America and the Middle East,” Rystad added.
The company said a willingness to invest more in exploration in 2019 and beyond “is likely” as oil prices are “likely to stay at current levels for some time”.
“However, E&Ps will also prioritize development and infill drilling, so we don’t see the share of exploration wells to improve until 2020, when focus on reserve replacement is expected to become more imminent,” Rystad added.
The company told Rigzone that, given $70 oil, exploration and appraisal wells are likely to make up three to four percent of total global wells drilled by 2025.
Rystad Energy is an independent energy research and business intelligence company providing data, tools, analytics and consultancy services to the global energy industry.
