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"Half of cost reductions in offshore developments attributed to downsizing, simplification and design" Offshore developments have benefitted significantly from lower breakeven prices over the last two years, with more than half of the cost reductions achieved through downsizing, simplification and design, latest Rystad Energy analysis shows. Less in-built flexibility and more standardized solutions have been instrumental in reducing the breakeven prices, and hence overall project costs. Intentions to optimize design, coupled with the recycling of projects, have stimulated engineering teams to reassess their design approach and in turn has made the project development and budgeting more predictable with reduced cost contingencies. Read more
"Continuous improvement in well performance and economics for Bakken Shale wells " by Maierdan Halifu, Analyst (Published by Oil & Gas Financial Journal, October Edition) In order to cope with the low price environment in 2016, shale focused companies have announced that they will prioritize developing their best acreage and optimizing their completion techniques. In the last few months, more and more operators have communicated that they have achieved better well performances compared to previous years with much lower well costs. We will try to answer how the operators are achieving this by studying the activity in the Bakken Shale play. Read more
"Sanctioning activity expected to pick up in the North Atlantic" by Espen Erlingsen, VP Analysis (Published by GeoExpro, October Edition) During 2010 to 2014, activity on the North Atlantic region was at an all-time high reaching a peak of 130 billion USD in 2014. Since then, the low oil price has reduced activity and spending levels. In 2016, total investments for the region is expected to fall to 75 billion USD. One of the main reasons for lower activity is the decline in new projects sanctioned. In the beginning of this decade, around 3.5 billon boe of new resources (both oil and gas) was sanctioned yearly. In 2014, the number dropped to 1.7 billion boe. Sanctioning activity increased in 2015, but this was driven by Johan Sverdrup. For the current year, sanctioned resources is expected to be 1.3 billion boe; the lowest actively levels in 30 years. Read more
"Southeast Asia: Struggling to keep up production" by Olga Kerimova, Senior Analyst, and Veronika Akulinitseva, Analyst (Published by PESGB Newsletter, October Edition) Long term production potential from the Southeast Asian region is dependent on more discoveries and faster sanctioning; at the current activity levels new projects are not able to compensate for the natural decline in production of mature fields in the region. This article assesses the Southeast Asia status and outlook, illustrated by the three key drivers: production, exploration success and spending. Read more
Is there still hope that the exploration business in Norway will be high value creation again? by Jarand Rystad, Managing Partner Last year, the exploration expenses on the NCS were about 30 billion NOK, and we discovered some 200 million boe. That implies a 150 NOK per boe before tax in exploration costs alone. So far this year, we have discovered about the same resources as last year, but at a lower expense – about 20 billion NOK. The current oil price level is around 400 NOK/bbl. Exploration expenses are therefore currently one third of the oil price, something which is obviously unsustainable. The shale oil business has minimal exploration expenses and the cost of shale wells are declining such that the wellhead breakeven cost now is below 40 USD. Read more
"New contracts to be awarded to the oilfield service industry following Petrobras' business plan" An economic recession and political corruption over the past two years has not set the best stage for the oil and gas industry in Brazil. A low oil price and large investment cuts have added to the challenges facing the country’s oilfield service industry. The service companies are fighting for new contract awards, and with a recovering market towards 2020, there are some interesting projects in the pipeline. Read more
"Shale breakeven prices have dropped ~50%, but not for long" Since the oil price started to drop, North American shale producers have reduced activity levels. At the same time, the main focus for companies has been to reduce the costs per well and increase the well performances. By following the cost and the production for every US shale well, Rystad Energy is able calculate how the breakeven prices have improved because of these changes. Read more
New times calls for new actions. Now is the time to revise strategies for oil and gas exploration.
The Economics of the E&P industry has gone through fundamental changes, both in terms of revenue but also in terms of cost reductions and efficiency gains. Furthermore, the conventional oil and gas industry is threatened by other sources of energy, such as unconventional oil and gas production, renewable energy, and by the growing concerns related to climate change. On top of this, exploration results over the last two years have been very disappointing both globally and on the NCS in particular.
This calls for a rethinking of exploration strategies. The goal of this conference is to provide valuable insights and input into the strategy update processes that are currently taking place, both on the industry, national and company level.
NCS Prospects – The Exploration Strategy Conference – organized jointly by GeoPublishing and Rystad Energy, brings together the larger exploration North Sea community to exchange expert insight and discuss how to go about exploration in a short and long term perspective.
During the two-day conference and exhibition, we gather a multitude of players on the Norwegian Continental Shelf – governmental organizations, oil companies, oil service companies, the financial industry and consultants – in an attempt to investigate the future of exploration in mature and frontier basins.
Do we need a new license policy?
Is it necessary to increase the APA-areas?
Should we drill more wildcats?
How do we go about new technology?
Can the workflow be more efficient?
We open up the exhibition floor for oil- and service companies to showcase their licenses, prospects and strengths in order to fuel the conversation on where your business goes next.