The upstream industry has been reluctant to invest in exploration recently, especially in wildcat wells, yet from 2013-2019, north-west Europe has seen some success through wildcat exploration.
Recently, the upstream industry overall has been reluctant to invest in exploration, especially in wildcat wells, yet between 2013 and 2019, the north-western part of Europe (particularly Norway and the United Kingdom) has seen some success in unearthing additional resources through wildcat exploration. These additional volumes have been dominated by liquids, contrary to the global discovery gas trend. Norway and the UK booked cumulative conventional recoverable resources of ~5.3 Bboe during this period, around 6% of total global discovered volumes. Norway spudded 228 wildcats between 2013 and September 2019, evenly spread across those years, compared to 129 in the UK over the same period, with 40 in 2013 decreasing to a mere eight exploration wells in 2018, and just five so far in 2019. Many of these discoveries have resulted in small or marginal finds, indicating that exploration activities have primarily focused on mature basins and areas within close proximity to existing infrastructure.
Discovered resources (MMboe) vs total number of wildcat exploration wells drilled, 2013–2019 (well count based on completion year). Source: Rystad Energy UCube, November 2019.
Norway has managed to maintain a steady 40–50% success ratio, pointing towards the paradigm shift in the country’s exploration strategy, with operators adopting a more conservative approach towards prospect selection. 2019 has marked a new high for the country since the oil price crash of 2014, with 520 MMboe of recoverable resources discovered, surpassing 518 MMboe discovered in 2018.
Remaining Frontier Areas in the NCS & UKCS
Over the past few years, both the NCS and UKCS have seen some exploration activity in their respective frontier basins, where a meaningful discovery with substantial volumes could act as a catalyst. Remaining frontier areas include:
The Barents Sea, Norway’s most successful region in recent years, with 1.1 Bboe discovered between 2013 and 2019. The province is estimated to hold more undiscovered oil and gas than the Norwegian North Sea and Norwegian Sea combined – nearly 64% of the total estimated undiscovered resources on the NCS. Equinor has been persistent in the area but has not experienced much success since its 434 MMboe Wisting discovery in 2013.
Lofoten Islands, a vital spawning ground for cod, where in a controversial drilling campaign Wintershall DEA’s Toutatis well failed to encounter commercial hydrocarbons; a big setback for Norway’s offshore industry, but received enthusiastically by environmental groups. Time will tell whether Wintershall DEA or other players decide to follow up with further wells in the area.
The UK Oil and Gas Authority is pushing hard to open up the country’s frontier areas, including the Faroe-Shetland Basin, Moray Firth, East Irish Sea, East Shetland Platform, Mid North Sea High and English Channel. It has provided several incentives for E&P companies, including new data and analyses, digital maps, prospect and discovery reports, and well and seismic data.
However, the underexplored West of Shetland is poised to be the primary focal point of frontier exploration moving forward, although the remoteness, deeper water depth, and complex geology all pose challenges to unlocking possible discoveries.
