Inspenet, October 7, 2023.
Statements from the major European oil companies
Leading companies such as Shell, BP and TotalEnergies have announced plans to increase oil and gas production in the next decade. This strategy will focus on low-cost, low-emission energy sources.
It is notable that both Shell and BP have modified their outlook compared to previous statements, where they maintained that oil production had peaked. Today, they recognize the importance of not quickly scrapping the current energy system without effectively establishing a clean system for the future. According to Shell’s Wael Sawan, ” oil and natural gas will remain essential for a long time .”
The vision of TotalEnergies
TotalEnergies is targeting a 2% to 3% annual increase in oil and gas production over the next five years, while celebrating successes in its exploration activities in Namibia and Suriname.
Discipline in expense management remains a constant feature in the industry. However, major oil companies and national oil companies are in a stronger financial position compared to a few years ago. According to WoodMac ‘s Julie Wilson, this financial strength has boosted confidence in the sector and could lead to a more optimistic outlook for exploration activities .
WoodMac forecasts a sustained recovery over the next five years, with major oil companies and national oil companies leading this process.
“Deepwater growing regions will be the focus of greater investments,” says the consulting firm. WoodMac highlights that the economic environment encourages growth in exploration spending.
Since 2018, discipline has been maintained in controlling expenses and optimizing the portfolio, which has resulted in a profitability in exploration activities that has exceeded 10%. In 2022, this figure rose to 20%. For this year, a 6.8% increase in spending on exploration is anticipated, driven largely by economic stability.
About deep sea exploration
In the medium and long term, deep and ultra-deep water maritime regions appear as areas with great growth potential. In particular, the Atlantic Margin of Africa and the Eastern Mediterranean are expected to lead this advance.
Countries such as Namibia, Greece, Egypt and Suriname are emerging as emerging destinations in oil and gas exploration, following a similar path to that which Guyana charted in 2019 when it became an oil-producing country after significant deepwater discoveries made by ExxonMobil and Hess.
The maritime market, which encompasses both the exploration and development of offshore resources, is experiencing notable growth. Olivier Le Peuch, CEO of SLB, the main global oilfield services provider, points out that this market is the fastest growing worldwide. This trend is due to prolonged economic cycles, an increase in production and renewed interest in exploration activities.
About the offshore market
Le Peuch, at the JP Morgan 2023 Conference, stated: “The offshore market is growing rapidly, with a tilt towards international offshore gas and the resumption of exploration and evaluation.” SLB anticipates an increase in marine exploration spending of more than 20% this year.
“We are in a unique cycle that enhances the long-term prospects of our industry, reinforced by the emphasis on marine gas and the resumption of exploration,” added Le Peuch.
According to a report published by Westwood Global Energy Group in May 2023, the exploration sector is expected to maintain its pace of activities at least until 2030. The main objective is to guarantee the continuity of production and adjust to future demand, placing emphasis on obtaining short-cycle, low-cost and low-emission oil and gas reserves, in addition to supplying gas to Europe.