Global Oil, Gas Discoveries Set to Hit 75-year Low in 2021, Drops from 12.5bn Barrels to 4.7bn BOE

Emmanuel Addeh in Abuja
Global oil and gas discoveries in 2021 are on track to hit their lowest full-year level in 75 years, if by the end of December there are no significant finds, a Rystad Energy analysis has shown.

As of the end of November, total global discovered volumes this year were calculated at 4.7 billion barrels of oil equivalent (boe) and, with no major finds announced so far this month, the industry is on course for its worst discoveries toll since 1946.

This would also represent a considerable drop from the 12.5 billion boe unearthed in 2020, although liquids continue to dominate the hydrocarbon mix, making up 66 per cent of total finds.

Seven new discoveries were announced in November 2021, unearthing around 219 million boe of new volumes, the report from Rystad, an independent energy research and business intelligence company providing data, tools, analytics and consultancy services, stated.

The monthly average of discovered volumes this year now stands at 424 million boe as a reduction in cumulative volume highlights the absence of large individual finds, as has been the case in previous years.

“Although some of the highly ranked prospects are scheduled to be drilled before the end of the year, even a substantial discovery may not be able to contribute towards 2021 discovered volumes as these wells may not be completed in this calendar year.

“Therefore, the cumulative discovered volume for 2021 is on course to be its lowest in decades,” says Palzor Shenga, vice president of upstream research at Rystad Energy.

The largest discovery in November 2021 was Russian group Lukoil’s Yoti West off the coast of Mexico, which is estimated to hold around 75 million boe of recoverable resources.

The discovery strengthens Lukoil’s cumulative discovered volumes in the North American nation. However, these volumes are still insufficient for commercial development and would require further discoveries of a comparable scale before a development concept could be drawn up.

These discoveries do, however, give hope to Mexico that the country can halt or slow down its production decline. Several wells are scheduled to be drilled in blocks offered in various bid rounds, many by leading international oil companies.

Offshore Malaysia, Nangka-1 became the second successive exploration well drilled within Block SK 417. The wildcat was drilled by Thai state operator PTTEP to a depth of 3,758 meters and discovered sweet gas within the Middle to Late Miocene Cycle VI clastic reservoirs.

Norway continues to unearth small-to-medium finds, providing an opportunity to materialise these discoveries with available infrastructure.

But despite the global slump, in September this year, the defunct Department of Petroleum Resources (DPR) said it was close to ramping up Nigeria’s 36.9 billion barrels crude oil reserves by 14 billion barrels and the country’s gas reserves by an additional 68 Trillion Cubic Feet (TCF).

The then Director of the organisation, Mr Sarki Auwalu, disclosed that the possibility of getting 14 billion barrels out of the 18 billion barrels in the works remained very high.

Auwalu disclosed that in addition to the increase of Nigeria’s gas reserves to 206 TCF, the DPR’s field analysis had shown that the possibility of proving the new oil and gas finds was becoming higher and gradually moving from P3 to P2.

In oil industry reserve classification, Proven (P1) reserve is an estimate of recoverable volume with a probability of recovery greater than 90 per cent under present technical and economic conditions, while Probable (P2) reserve is an estimate of recoverable volume with chances of recovery equal to or above 50 per cent and less than 90 per cent.

In addition, Possible (P3) reserve is an estimate of recoverable volume with a chance equal to or above 10 per cent and less than 50 per cent of being economically and technically feasible to extract.