South America:

Brazil’s pre-salt reserves

Royal Dutch Shell’s bids for three pre-salt blocks in Brazil’s deepwater Santos Basin in October provided proof of two things: firstly, that offshore Brazil is among the world’s most promising deepwater regions, and secondly, that such mega-projects are becoming financially viable again for supermajors.

In 2016, the Brazilian authorities scrapped a law that required state-owned oil and gas company Petrobras to be the operator and own 30% of all pre-salt offshore projects, opening the door for the likes of Shell, and rivals BP and Exxon Mobil, which snapped up two blocks and one block, respectively.

Shell is confident it can produce oil from Brazil’s pre-salt basins – one of the last major plays in the world in its infancy and estimated to contain 80 billion barrels of oil in reserves – at $40 a barrel.

Middle East:

Offshore Egypt

With potential reserves of 850 billion cubic metres, Zohr, the biggest gas discovery in the Egyptian Mediterranean Sea, started production in December 2017 and is expected to reach its peak capacity of 2.7bcf/d in 2019. 

Located 110 miles from Port Said with a depth of 1,500m, 20 wells are expected to be drilled by Eni by the end of 2019. The reservoir also has upside potential at the deeper Cretaceous target.

Other recent onshore and offshore discoveries include North Alexandria and Atoll. Oil and gas now accounts for 16% of Egypt’s gross domestic product, and 54% of its foreign direct investment.

Africa

Mauritania-Senegal-Gambia-Bissau-Conakry (MSGBC) Basin

Westwood Energy reports that the majority of discovered volumes in 2017 came from a handful of high-impact wells, with the largest including Kosmos Energy’s Yakaar gas discovery in the MSGBC basin offshore Senegal, and ExxonMobil’s Payara, Snoek and Turbot oil finds offshore Guyana. 

Hot spots for natural gas exploration in 2018 will likely be the MSGBC and Nile Delta, and oil in the Suriname-Guyana basins. An Exxon led JV is expected to drill out multiple Cretaceous prospects, as well as the ongoing frontier carbonate Ranger prospect. On the Surinamese side, Kosmos is expected to drill two deepwater wells, which will mark the company’s first exploratory drilling outside of the West African Margin.

North America:

US Gulf of Mexico 

Despite low oil prices, Shell is advancing its Kaikias, Appomattox, and Coulomb Phase 2 projects in the deepwater Gulf of Mexico, having lowered break-even costs and reduced cycle times.

Located in the Mars-Ursa basin, the Kaikias field is estimated to contain more than 100 MMboe of recoverable resources. Phase one will centre around three wells designed to produce up to 40,000 boe/d, with production expected in 2019. The Appomattox project offshore Louisiana will initially produce from two fields, with average peak production estimated at 175,000 boe/d (Shell-share).

This year could see a focus on the more established and often ILX driven Miocene play in the Gulf of Mexico. Westwood Energy reports that the challenging Paleogene Wilcox play could see a handful of tests.

Europe:

UK Continental Shelf

Ineos is pressing ahead with its deepwater operations in the UK North Sea, having a majority stake in two gas exploration licences to the north of Shetland. The chemicals company operates the 100-mile Forties pipeline, the North Sea’s largest, which the transports 450,000 barrels of oil every day.

The Arctic:

Barents Sea

Statoil has submitted development and operation plans for the $5.92bn Johan Castberg project in the southern Barents Sea, which it claims is the largest new offshore development in the world in 2017. Recoverable resources are estimated at 450-650 MMboe. Statoil anticipates first oil in 2022. 

Another Norwegian operator, Eni Norge, is to drill a pair of production wells in the Goliat field in the Barents Sea, and the Goliat West appraisal well. The Goliat field contains around 180m barrels of oil.