Oil and gas exploration spending will recover from historic lows to average $22 billion a year over the next five years, according to Wood Mackenzie.
Attractive economics, greater emphasis on energy security and the discovery of new resources will incentivise NOCs (national oil companies) and energy majors to boost exploration activity, the consultancy said in a new report.
“Explorers will become bolder in the coming years,” said Julie Wilson, director of global exploration research at Wood Mackenzie.
Oil and gas companies reported record profits last year after Russia’s invasion of Ukraine pushed Brent crude, the benchmark for two thirds of the world’s oil, to nearly $140 a barrel.
Brent, which has since given up most of its gains, is currently trading at $83 a barrel as Russian crude continues to flow into the market despite harsh sanctions.
Wood Mackenzie, which expects exploration spending to increase by 6.8 per cent this year over 2022 levels, said full-cycle returns have been consistently above 10 per cent since 2018 and exceeded 20 per cent in 2022.
“These positive results have increased confidence in exploration,” Ms Wilson said.
“Improved results are down to many factors. Portfolio high grading coupled with greater discipline in spending and prospect choice mean only the best prospects are drilled and waste is minimised,” she added.
Wood Mackenzie said that deepwater and ultra-deepwater exploration would provide the most growth opportunities in the long term.
The Atlantic Margin of Africa and the gas-rich Eastern Mediterranean will experience the highest growth, the consultancy said.
“There are areas where leads and prospects are being worked up with recent seismic data, for example Uruguay, southern Argentina and deepwater Malaysia,” Ms Wilson said.
In a report last month, Wood Mackenzie said the annual oil and gas investment does not need to rise substantially from current levels of $500 billion to meet peak demand in the 2030s.
Spend levels “not much higher” than the current run-rate can deliver the supply needed to meet demand through to its “peak and beyond”, the consultancy said.
International oil majors have reduced spending over the past few years under increasing pressure from governments and institutional investors.
The International Energy Forum has estimated that annual oil and gas upstream spending needs to increase to $640 billion by 2030, from $499 billion last year, to ensure adequate supplies.
Energy industry heads have blamed underinvestment in the sector for structural imbalances and growing volatility in the oil market.
Global oil demand is expected to expand by 2.2 million barrels per day this year, with China accounting for more than 70 per cent of the growth, according to the International Energy Agency.
However, growth in crude consumption is expected to slow to one million bpd next year as the post-pandemic economic rebound runs out of steam, the IEA said in its monthly oil market report last week.
Opec expects healthy oil market fundamentals in the second half as the global economy continues to recover from the coronavirus pandemic.
The group has forecast global oil demand growth of 2.4 million bpd for this year and 2.2 million bpd for 2024.
UAE squad
Esha Oza (captain), Al Maseera Jahangir, Emily Thomas, Heena Hotchandani, Indhuja Nandakumar, Katie Thompson, Lavanya Keny, Mehak Thakur, Michelle Botha, Rinitha Rajith, Samaira Dharnidharka, Siya Gokhale, Sashikala Silva, Suraksha Kotte, Theertha Satish (wicketkeeper) Udeni Kuruppuarachchige, Vaishnave Mahesh.
UAE tour of Zimbabwe
All matches in Bulawayo
Friday, Sept 26 – First ODI
Sunday, Sept 28 – Second ODI
Tuesday, Sept 30 – Third ODI
Thursday, Oct 2 – Fourth ODI
Sunday, Oct 5 – First T20I
Monday, Oct 6 – Second T20I
Sholto Byrnes on Myanmar politics
How to avoid crypto fraud
- Use unique usernames and passwords while enabling multi-factor authentication.
- Use an offline private key, a physical device that requires manual activation, whenever you access your wallet.
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- Only invest in crypto projects that you fully understand.
- Critically assess whether a project’s promises or returns seem too good to be true.
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More on animal trafficking
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
BMW%20M4%20Competition
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BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
Torque: 1,000Nm
Transmission: 8-speed auto
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On sale: Now
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Company%20Profile
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PROFILE OF HALAN
Started: November 2017
Founders: Mounir Nakhla, Ahmed Mohsen and Mohamed Aboulnaga
Based: Cairo, Egypt
Sector: transport and logistics
Size: 150 employees
Investment: approximately $8 million
Investors include: Singapore’s Battery Road Digital Holdings, Egypt’s Algebra Ventures, Uber co-founder and former CTO Oscar Salazar
MATCH INFO
Europa League semi-final, second leg
Atletico Madrid (1) v Arsenal (1)
Where: Wanda Metropolitano
When: Thursday, May 3
Live: On BeIN Sports HD
Coal Black Mornings
Brett Anderson
Little Brown Book Group
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
THE%20SPECS
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The specs
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COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
WHAT IS A BLACK HOLE?
1. Black holes are objects whose gravity is so strong not even light can escape their pull
2. They can be created when massive stars collapse under their own weight
3. Large black holes can also be formed when smaller ones collide and merge
4. The biggest black holes lurk at the centre of many galaxies, including our own
5. Astronomers believe that when the universe was very young, black holes affected how galaxies formed
