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High impact exploration declined in 2023 - Westwood

High impact exploration drilling declined in 2023, but there are still significant reserves of hydrocarbons to be discovered. (Image source: Adobe Stock)

Exploration & Production

The State of Exploration 2024 report from Westwood Global Energy Group reveals that high impact exploration drilling in 2023 declined by 21%, due to energy transition strategies, industry consolidation, rising well costs and reduced activity in former hotspots

The commercial success rate is down seven percentage points on the previous year, with fewer giant discoveries resulting in a year on year decline in the average discovery size, and overall drilling finding costs increasing by a factor of six since 2019 to US$1.2/boe.

The findings also highlight a decrease in the number of companies participating in high impact drilling (down from 99 in 2019 to 68 in 2023), with supermajors and NOCs continuing to account for the majority of high impact well equity and leading in terms of both discovered resource and commercial success rate.

However, there are still significant volumes of hydrocarbons to be discovered, and cycle times are reducing.

Graeme Bagley, head of Global Exploration and Appraisal at Westwood said, " High oil prices previously led to high levels of exploration drilling. The appetite for exploration is still there but energy transition strategies are having a significant impact on the way the companies choose to replenish their reserves base, with industry consolidation and new technologies also having a part to play.”