Despite the massive cut backs the industry is facing, including cuts to exploration programs, drill bits continued to spin in 2015. Elaine Maslin reports.
Atwood Achiever. Photo from Atwood Oceanics.
2015 has been a drawn-out tale of cost cutting, capex reduction, exploration cutbacks, retreats back to heart lands and pulling back from risky frontiers.
But you wouldn’t tell if you looked at the year’s exploration results. Deepwater ranks high, as do new plays and frontier areas and it’s largely the majors leading the charge.
“The simplest way of explaining this is we are yet to see the exploration outcomes from the new strategies,” says Andrew Latham, vice president of exploration research at Wood Mackenzie. However, while companies are adapting, he thinks there will be players willing to test these types of new resources, noting that the top 10 discoveries for 2015 so far are very much in the hands of the majors.
Overall, the average discovery size has been about 700 MMbbl, slightly up on recent years, with gas accounting for about 80% of it. But, the results are somewhat skewed by the top two finds, Zhor and Ahmeyim (previously known as Tortue), off Egypt and Mauritania, respectively.
The Saipem 10,000 drillship.
Zohr, discovered by Eni, using the Saipem 10,000 drillship, contains some 3960 MMboe, according to Wood Mackenzie, or 30 Tcf/5.5 billion boe potential reserves, according to IHS. It is a massive find and opens a new play, the Miocene reef play. It has the same petroleum system as Israel’s giant Leviathan, but a new reservoir, the Miocene reef, Latham says.
“Not only is Zohr very large, assuming it is appraised well, it is clearly commercial and that commerciality of new resources has been an issue in recent years,” he says. “If it does pan out to be commercial, we will have a higher average proportion of commercial reserves than resources booked this year,” Latham notes, adding that this is something that has been lacking in recent years.
It is also a significant find in terms of gas markets, particularly for Egypt. “All bets are now off in the Eastern Mediterranean in terms of the gas market,” Latham says.
For some time, Egypt, which has LNG export facilities, has been reversing pipelines to bring gas into the country, because demand has outstripped local supply. Zohr could change the game, which had seen Egypt eying importing gas from Cyprus and Egypt.
“And then the open question is ‘how many more Zohr-like prospects are there either in Egypt, Israel or Cyprus,” Latham adds.
Data from Infield Systems
Ahmeyim is another frontier play, however, it is not as close to markets as Zohr. Ahmeyim was discovered by Kosmos Energy, using the Atwood Achiever drillship, and labelled the largest Atlantic Margin discovery of 2015. It could have been an oil or has find, Latham says.
Like Zohr, it also opened a new petroleum system, the outboard, large-scale Cretaceous petroleum system across Mauritania-Senegal, and could hold some 15 Tcf, according to Kosmos. Exploration and appraisal is set to continue into 2016 on Ahmeyim, Kosmos says.
Liza might not be top of the rankings, however, it is a significant find for Guyana. It is the first oil discovery in Guyana and is also another play opener and ExxonMobil is reported to be fast-tracking a project to unlock its reserves.
Liza could also be bigger than the figures so far released, Latham says. “I wouldn’t be surprised if it turns out to be significantly bigger than 250 MMboe,” he adds. Guyana’s minister of governance has in fact suggested the field could contain 700 MMbbl reserves.
According to Matthew Jurecky from GolbalData, Liza’s commercial success could redefine the Equatorial basin as a global deepwater production player.
Missing from our top 10 list is the recent reported 30 Bcm or 1 Tcf of gas found in the Lira discovery in the Black Sea, offshore Romania, in October.
It is the second announced discovery from the deepwater Black Sea from only three exploration wells. Cumulative resources of the two discoveries is expected to be 3-4 Tcf, Wood Mackenzie says. There are a further four exploration wells which have been drilled and completed by ExxonMobil, which have yet to have their results released.
Lira was drilled in 700m water depth using the semisubmersible drilling rig Transocean Development Driller II. The well was temporarily abandoned for further evaluation. Lukoil plans to drill an exploration well in 2016 and reprocess the seismic data.