Future Onshore Global Hotspots

David Bamford, Finding Petroleum

It is fashionable to identify deepwater – especially in the South Atlantic, unconventionals – especially in North America, and the Arctic – offshore Alaska, Russia, perhaps Greenland – as the ‘hot spots’ in the current global exploration scene.

Onshore exploration remains unfashionable or it least so it seems from the number of wells being drilled there – see for example the recent review by Richmond Energy Partners – and the comparatively small amount of articles written on the subject.

We have three reasons for believing that onshore exploration will soon see a resurgence:

1.    Very large resources remain to be found.

2.    The costs of drilling offshore are becoming prohibitive.

3.    Deepwater development projects can take a long time to mature (to go from discovery to first production) and have the nasty habit of yielding major cost and schedule overruns…here is but one example.

We suggest that these factors will persuade especially small-to-medium sized explorers to turn to the onshore.

WHERE THEN MIGHT THEY GO?
Despite the very large numbers proposed – Kimmeridge Energy has suggested up to 20 trillion boe of resources – this is not simply about a global search for shale oil and shale gas.

Nor is it about the pursuit of “interesting” geology. In fact we declare that without the profound understanding of geology on a global and regional scale, as exemplified by NEFTEX, onshore exploration will lead to disappointment, frustration and poor returns on investment.

In addition, we should humbly remind ourselves that exploration for oil & gas onshore has been going on for around 150 years and that if we are going to make an argument in favour of something new, something previously unrecognised and untested, then we had better be able to talk about one or more of the following:

»    “New Geography” = a country is opening up after being closed to western IOCs for a long while; current examples would be Mexico, Myanmar, Lebanon, Libya.
»    “New Technology” = we can see or do things we couldn’t do before; current examples would be ‘fracking’, gravity gradiometry, wireless seismic, microseismic. Note* that new seismic technologies may be required to locate shale oil/gas “sweet spots”.
»    “Analogues” = ‘why shouldn’t that idea work here?’; current examples would be rift systems, intra-cratonic Palaeozoic basins, sub-salt.

Hot’ Onshore Places
Looking at the next 12/18 months, where do we see the ‘action’?
»    Myanmar
»    Unconventionals
 •    Russia (Exxon/Rosneft testing whether the Bazhenov shale makes commercial sense as an oil play)
•    Brazil (Petroenergia for example, in the Sao Francisco basin)
•    maybe Argentina (but this requires the government to get its act together!)
»    African Oil
•    Kenya, Ethiopia (Tullow Oil et al. chasing the rift system to the north)
•    Chad, CAR, Sudan (some brave souls figuring out what to do in these ‘data poor’ interior basins)
•    And coming in from ‘left field’, maybe Angola sub-salt’ onshore (following the big success of
Cobalt International in the sub-salt offshore, somebody chasing this play back onshore)