Giant prospects in Guyana will be at forefront of 2022 exploration
U.K. based consultancy group Wood Mackenzie says the exploration sector will accelerate its repositioning for the energy transition in 2022 and this will see advantaged resources being targeted to replace maturing legacy assets.
Conventional exploration will follow the disciplined path set in 2021, despite improved prices. Spend will total US$20-25 billion, and wildcatting will be led by the Majors and larger National Oil Companies (NOCs).
WoodMac said these companies will find three-quarters of the 15-20 billion barrel of oil equivalent (boe) it expects from new discoveries. Success at this scale will deliver double-digit full cycle returns at US$50/bb.
“Deepwater plays with highly productive reservoirs will be prioritised, including giant prospects in Brazil, Guyana, Suriname, Namibia and South Africa,” WoodMac said.
Explorers will once again downplay activity, with drilling and licensing kept under the radar. “Only rare high-impact wells will be referred to as frontier,” WoodMac said, pointing out that what will be vocalised are the benefits of new discoveries and greenfield development in driving down portfolio emissions intensity.
Majors such as ExxonMobil and Total have been doubling down on assets that promise to deliver lighter oil at lower breakevens. Exxon has had significant success in this regard at the Stabroek Block offshore Guyana where it has found over 10 billion boe since 2015 in partnership with co-venturers Hess and CNOOC. The company is already producing oil at the Liza Phase 1 Development with a second phase set to come onstream by early 2022 and a third development at the Payara field targeted for 2024.
Guyana’s biggest project to date and one of the largest subsea developments this century is pending government approvals. Yellowtail will deliver a whopping 250,000 barrels per day (bpd) at the Exxon-operated Stabroek Block by 2025, pushing Guyana’s total output well over 800,000 bpd.