Recovery is underwayNeivan Boroujerdi, Senior Analyst, Wood Mackenzie © Wood Mackenzie

Recovery is underway

According to WoodMackenzie, exploration on the NCS is recovering after a tough couple of years.

Neivan Boroujerdi, Senior analyst in the North Sea Upstream Research team in WoodMackenzie, shared his insights on Norwegian exploration in a global context with the audience on the 2nd Exploration Strategy Conference in Stavanger in November.

The demand is high.

The future global liquids capacity depends on yet-to-find volumes from exploration. It is predicted that in 2040 the yet-to-find represents 14% of the global liquids capacity. In addition, Europe is dependent on gas important and even more so after the restrictions at Groningen.

But global exploration has been in trouble the last couple of years, with 60% less exploration spend, 50% less wells and hence decreasing discovered volumes. The majority of discovered volumes comes from deepwater discoveries by major oil companies.

A similar trend can be seen in Norway. Norwegian exploration has had a tough time the last couple of years with 50% decrease in exploration wells in 2017 and discovered volumes have dropped significantly (see figure below).

© WoodMackenzie exploration service

Recovery is under way

It is however not all doom and gloom because exploration in Norway is on its way back and on track for the best performance since 2012 and hitting the global average! Worldwide, Norway sits in the top 10 of forecast E&A spend, prospective resources and future volume creation. And most importantly there is still potential on the NCS as can be seen from the creaming curves.

Norwegian Basin creaming curves (Source: Wood Mackenzie, Exploration Service)

Already in the next couple of months several exploration wells will be drilled with significant pre-drill estimates which can break these creaming curves in case of discovery. These are the wells to watch in the next couple of months:

Wells to watch the coming months according to WoodMackenzie- note results of some of these wildcats are already known