A New Horizon for Oil & Gas ProductionJune 24, 2013
Despite the despite the technological advances that have led to a boom in unconventional oil and gas production, and despite the spectacular failure of Deepwater Horizon in 2010 , the international extraction industries are expected to experience an even bigger move toward ultra-deep sea drilling in coming years. This is because the combinations of technical know-how and (relative) regulatory stability that have led to a thriving unconventional sector in North America are unlikely to be replicated elsewhere. This is the Second Age of Oil, but it will not be driven entirely by shale. Overseas, the future is under the sea. Fuel Fix outlines some of the upcoming deep sea plays:
East Africa: Anadarko, based in The Woodlands, and Italian oil and gas firm Eni have discovered more than 100 trillion cubic feet of gas off Mozambique in southeast Africa.
Mediterranean Sea: Houston-based Noble Energy made a new deep-water natural gas discovery off Israel, the seventh consecutive field discovery for Noble and its partners in the Levant Basin. Discovered gross resources, combined with those in an adjacent block, are estimated to range from 1.6 trillion to 2 trillion cubic feet of natural gas, the company says.
Brazil: The South American country is the site of some of the biggest crude discoveries this century. Bloomberg reports Brazil is relying on the pre-salt region, so named because significant amounts of oil and gas are believed to lie below a deep layer of salt, to double production by 2020.
The Arctic: Irving-based Exxon Mobil Corp. plans to pump $200 million into a research center in Russia, where it is partnering with Russia’s Rosneft to explore of more than 180 million acres in the country’s Arctic region. Norway has issued licenses to companies including its own Statoil, Royal Dutch Shell and Paris-based Total, to explore for oil and gas in the Barents Sea.
Australia: British oil giant BP is eyeing deep-water drilling operations off the southern coast of the country, in what is known as the Great Australian Bight.
Tudor, Pickering, Holt & Co. analyst Robert Kessler said he sees opportunities in the new frontier for firms of all sizes and geographic locations. He also sees the majors playing catch-up in some riskier, more time-consuming plays.
“In some cases, you have early entrants that are not the majors,” he said. “But the majors are so big. They are everywhere. They need to be everywhere to have the options to maintain their portfolios over time. If they are not always the first participant in a given market, they are likely to keep their eye on that market. There is a need to keep the hopper full.”