Oil & gas discoveries in 2021 to hit lowest level in 75 years, Rystad says

An analysis of the annual global oil and gas discoveries in 2021 by the Norwegian energy intelligence firm, Rystad Energy, has revealed that discovered volumes are on track to sink to their lowest full-year level in 75 years should there be no significant finds by the end of the month.

Rystad Energy’s analysis shows that if the remainder of December fails to yield any significant finds, the global oil and gas discoveries for this year will hit their lowest level in decades.

Taking into account that total global discovered volumes this year are calculated at 4.7 billion barrels of oil equivalent (boe) as of the end of November and with no major finds announced so far this month, the company says that the industry is on course for its worst discoveries toll since 1946. Moreover, this would also represent a considerable drop from the 12.5 billion boe unearthed in 2020.

Liquids continue to dominate the hydrocarbon mix, making up 66 per cent of total finds. According to Rystad, seven new discoveries were announced in November 2021, unearthing around 219 million boe of new volumes.

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

Russian group Lukoil’s Yoti West off the coast of Mexico was the largest discovery in November 2021.  It is estimated to hold around 75 million boe of recoverable resources, strengthening Lukoil’s cumulative discovered volumes in the North American nation.

However, Rystad claims that 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.

Although these discoveries give hope to Mexico that the country can halt or slow down its production decline, Rystad also points out that several wells are scheduled to be drilled in blocks offered in various bid rounds, many by leading international oil companies.

Another relevant discovery from last month was made offshore Malaysia when 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.

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

Palzor Shenga, vice president of upstream research at Rystad Energy, remarked: “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.”