Half-Year Discoveries are the Lowest of the Century

Rystad Energy (Oslo, Norway) estimates global discoveries of conventional resource volumes reached just 4.9 Bbbl of oil equivalent (boe) in the first half of 2020, the weakest-performing first half of the 21st century. Compared to the same period in 2019, the resource volumes were 42% lower and the number of discoveries was down by 31%.
The average monthly discovered volumes for the first six months of 2020 are estimated at 810 million boe, a 34% decline from the same period last year. This year could be on track to repeat the 2019 predominance of gas discoveries, with 55% of the volumes discovered so far being categorized as gas, says Rystad. The top five largest discoveries account for about 68% of the total discovered volumes.

The monthly average was pulled down primarily by June, which saw only three small onshore discoveries, totaling around 16 million boe in discovered volumes. January and May were the most successful months in the first half of 2020 due to significant discoveries such as Jebel Ali in the United Arab Emirates, Maka Central in Suriname, Uaru in Guyana, and 75 Let Pobedy in Russia.

“Last year we saw the highest volumes of discovered resources since the last downturn. Based on the large number of high-impact exploration wells planned for this year, 2020 was meant to follow the same path. But then COVID-19 struck and the oil market crashed in 1Q20, resulting in delays and cancellations as operators cut budgets,” says Rystad Energy’s upstream analyst Taiyab Zain Shariff.

Russia, South America, and the Middle East account for about 73% of the total discovered resources so far in 2020, with Africa and Australia sliding to less than 1% of the total discovered resources. Of note is that nearly 70% of the resources were discovered offshore.

A total of 49 conventional oil and gas discoveries were reported during the first half of 2020, of which 27 were made known during the global lockdown and travel restriction period. These travel bans and logistical issues had only a slight effect on projects in the testing and completion phase, but they did cause delays for projects in the initial and ongoing drilling phase that required crew changes. This could be one of the reasons for the lower number of discoveries in May and June.

SOURCE: The Weekly Propane Newsletter, July 9, 2020. Weekly Propane Newsletter subscribers receive all the latest posted and spot prices from major terminals and refineries around the U.S. delivered to inboxes every week. Receive a center spread of posted prices with hundreds of postings updated each week, along with market analysis, insightful commentary, and much more not found elsewhere.