Exploration volumes defy global energy trends in 2015

With 2015 exploration volumes on track to match those of 2014, the industry's surprising success continues despite spending cuts, weak oil prices, and an emphasis on small, near-term projects of higher value. Our analysts weigh in on whether it's simply too soon to see changes in a more cautious exploration landscape.  

As 2015 comes to a close, the exploration industry remains on track to match or even exceed its 2014 volumes at 14 billion barrels of oil equivalent (boe). Its 10 billion boe total reached at the end of September is just 3% less than our equivalent estimate from last year. The addition of Q4 discoveries, end-of-year disclosures, and positive appraisals of recent finds should boost that volume ever closer to last year's total.  

The two largest finds of the year — gas discoveries at Zohr in Egypt's Levant Basin and Ahmeyim in deepwater Mauritania — make up half of global new field volumes for 2015, 80% of which are gas. These discoveries are striking in their opposition to predictions made at the end of 2014 that industry-wide cost cutting and a shift to high-value, short-term investments would limit exploration volumes. 

Despite exploration companies retreating to drill 70% of their wells in known, mature geographies with existing infrastructure to keep cost and risk low, the year's most significant find — Egypt's Zohr gas discovery — was an entirely new play. Overall, however, risk-averse behaviour paid off more in 2015, with one in three completed wells yielding a discovery over a 28% success rate in 2014. 


But is it simply too soon to see the big picture emerging from a more cautious exploration landscape? Perhaps — this year's findings are heavily weighted to a small number of giant discoveries in frontier plays. While that trend is consistent with previous years, it could be that many companies still have yet to fully adjust to their new environment. And many NOCs have been slow to react against the current downturn, meaning deeper spending cuts could be just around the corner.

Overall, 2015 has maintained long-established exploration trends in its reliance on a few large finds, chiefly in gas, and predominantly in deepwater. While the challenge to convert these resources into commercial reserves remains, this year's exploration results should meet or exceed those of 2014 despite a weaker market.

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As well as being available as part of our subscription service, our report "Exploration volumes in 2015 on track, despite spending cuts" is also available for purchase. 

You may also be interested in our Exploration Service, which harnesses our proprietary upstream data and analysis to meet your company's specific strategic goals.   

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