What is the future of oil and gas exploration?
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The results of our annual Future of Exploration Survey are in. The industry has had its say on everything from the most exciting discoveries of the last year, to the role of exploration in the energy transition.
So, what did the 2022 survey discover?
The energy transition looms ever larger for explorers
These are uniquely challenging times for exploration. In our survey, few expect exploration to cease soon, but the focus on advantaged barrels continues to intensify. As the transition takes hold the barrels with the strongest economics and lowest carbon emissions will be the ones that make it to market. In 2022, explorers expect a greater emphasis on shorter-cycle opportunities and more attention to carbon.
Our survey shows European Majors are perceived as the most energy transition-ready, having adapted their strategies faster than some of their peers. CCUS and upstream decarbonisation are among the key transition initiatives.
The well count looks set to rise in 2022 – but discipline holds
After the pandemic-impacted reductions of 2020 and 2021, many explorers are planning for more wells in 2022. However, overall budgets look set to remain flat with headcounts unlikely to increase.
Priorities around performance metrics have also changed since the peak of the pandemic. Capital efficiency perhaps unsurprisingly topped the list of explorers’ most important metrics in 2020. The industry has now shifted back towards exploration value creation. Time to first oil or gas is also of greater importance – reflecting a laser focus on executing with pace.
Read Wood Mackenzie’s Future of Exploration survey 2022 results
Where were the most exciting discoveries in 2021? Looking ahead, what average oil price is required to explore in different themes? How do the strategies and risk appetites of NOCs, larger explorers and smaller players differ? What’s the breakdown of exploration spend in 2022?