After the collapse in the oil price and the Covid-19 pandemic, well count is expected to drop by as much as 35% on 2019 levels, according to Westwood Global Energy Group.
After the collapse in the oil price and the Covid-19 pandemic, well count is expected to drop by as much as 35% on 2019 levels, according to Westwood Global Energy Group.
At the start of the year, the high impact well count had been expected to be similar or slightly higher than the 93 wells completed in 2019. The energy analyst now expects 60-70 high impact exploration wells to be completed by the end of 2020, back to the numbers seen from 2016 to 2018 after the 2014 oil price crash.
Around 2.1 bnboe has been discovered so far this year from the 26 high impact wells completed and 2.5 bnboe of risked volume is being tested by wells currently drilling, dominated by the Shafag Asimam well in Azerbaijan, with another 4.3 bnboe risked from the remaining expected wells in the programme yet to spud.
Westwood now expects to see a total volume of around 6 to 9 bnboe to be discovered in 2020, down 40% or more from the 15 bnboe discovered in 2019, which included giant discoveries in Russia and Iran.
In 2020 a firm rig contract is no guarantee of a well being drilled, Westwood said. For example, CNOOC’s planned Pelles A-71 well in Canada’s Flemish Pass has been postponed due to Covid-19 concerns as has the Stangnestind prospect in the Barents Sea, by Aker BP. Contracts are being closely scrutinised and in some cases force majeure clauses triggered, Westwood added.
All regions are expected to see a decline in drilling, with North America (including Mexico) likely to take the biggest hit, although it will still be the region with the most wells. The Eastern Mediterranean may have very few high-impact wells in the rest of the year, and Sub-Saharan Africa will likely only see 3-5 wells being completed. Drilling plans in the Central North Sea, in Guyana and Suriname and the shallow water Campeche area in Mexico are likely to be less affected, although Covid-19 may yet limit operations even where companies are keen to drill.
