Having assessed the most promising oil-focused exploration wells of 2021, the time has come to do pinpoint this year’s up-and-coming gas wildcats. It will not be easy to forget and let go of all the difficulties that 2020 generated – global gas production decreased by 4% compared to 2019, capital expenditures were cut across all continents, exploration wells were routinely delayed until external conditions improve. In some cases, the COVID-induced market depression has had unexpected consequences that either directly or indirectly impact exploration drilling – look no further than insurgents in Mozambique debilitating the 13mtpa Mozambique LNG project. Not everything was negative in 2020, albeit one needs to relativize the concept of success – for instance, the 2020 oil and gas price slump has insulated gas demand from an even steeper decline as low prices made it financially viable to ramp up gas-powered generation.
Interestingly, projects focusing on LNG entertained higher odds of keeping their market share as overall global LNG demand actually increased over the course of 2020, attaining an all-time high of 362-363 million tons LNG. Simultaneously, gas production that was less mobile and flexible in terms of diversified outlet markets suffered tangibly more, as attested by US gas producers and Europe’s main pipeline supplier, Gazprom. With this being said, one might assume that exploration wells that were drilled with an arrière-pensée for LNG dominated the 2020 landscape and little could be further from the truth. Be it UAE’s Jebel Ali find, South Africa’s Brulpadda or perhaps even Turkey’s Sakarya, the majority of last year’s discoveries will provide much-needed gas for economies that have gotten used to gas imports, spinning a new story of self-sufficiency. Related: Pandemic Puts Saudi-Kuwaiti Oil Plans On Ice
We have analyzed the hottest gas prospects of 2021 and present you the Top 5, fully cognizant of the fact that in depressed times the highest impact wells might come from high-risk wildcats.
The most likely candidate for the largest 2021 gas discovery will be Skuratovskaya-2, Gazprom’s second prospecting well in the Skuratovskaya block in the Arctic Kara Sea. There are several reasons corroborating this claim. First and foremost, despite being offshore the Skuratovskaya block is adjacent to the world’s largest gas field, Bovanenkovo. Second, all previous drillings in the Kara Sea have unearthed massive gas reserves; the last of the discoveries was the Skuratovskaya-1 well which unearthed 202 BCm in 3P reserves (the field was quickly renamed “75 Let Pobedy” to commemorate the Soviet Union’s WWII victory). Although Gazprom is evidently not eager to develop cost-heavy Arctic fields and intends to bring them onstream after 2030, it is still pushing forward with drilling, Skuratovskaya-2 is expected to take place in the summer months.
- Cronos-1 (Cyprus)
Following the undisputable success of the 6.5 TCf Calypso discovery in 2018, one of the largest gas finds globally in 2018, Total and its partner ENI (both hold 50% of Block 06) are set to drill the Cronos-1 wildcat in the second half of 2021. Initially the wildcat was assumed to be spudded in April 2020, however, the severe impact of COVID-19 delayed it by more than a year. Off the bounds of Turkey’s (hardly airtight) continental shelf claim vis-à-vis Cyprus yet still very close to Calypso and Glaucus, Cronos is expected to confirm the existence of even larger deposits within Block 06. The well, located to the southwest some 150km off the Cypriot coast, will be drilled in water depths of 2300-2400 meters, i.e. several hundred meters deeper than Calypso and Glaucus. The restart of the Idku LNG and the rumored tying-in of Cypriot discoveries to Egypt’s liquefaction infrastructure indicates that should there be a Cronos discovery in late 2021, it would most probably be marketed as LNG.
- Rencong-1X (Indonesia)
The coronavirus pandemic has also pushed the spudding of Rencong-1X, a potentially frontier-opening offshore wildcat to the north of Sumatra, well into 2021. Repsol (51% stake and operatorship) and Petronas (49%) will target the Tampur Carbonate Formation (Upper Eocene/Lower Oligocene) that has heretofore never been drilled, with estimated resources of 4 TCf. Rencong-1X is located 40km from the Sumatran coastline and will be spudded in water depths of 1000-1100 metres. Repsol has had its fair share of difficulties along the project’s administration, primarily connected to the provision of a suitable drillship all the while complying with Indonesian regulations but now it seems that those travails have been left behind. Against the background of steadily declining mature gas production in Indonesia, the emergence of a new gas-rich frontier might spark a mini-revolution in the North Sumatra Basin. Related: How Will We Pay for the Energy Transition?
- Block 09 (Lebanon)
The French major Total will try to overcome the disappointing result of Lebanon’s first-ever offshore wildcat that was spudded in February 2020. Located within Block 04, Byblos-1 turned out to be non-commercial and was subsequently abandoned. This year the drilling of a second wildcat (still unnamed) in Lebanon’s offshore and there are several reasons to believe that it will fare better than Total’s pioneering wildcat. First and foremost, it is located to the south to Block 04, much closer to the maritime border with Israel, effectively abutting the Tamar field, hence the prospects of the Tamar Sandstone reservoirs would be higher than with Block 04. Due to ongoing Lebanese-Israeli maritime border disputes the operator has so far kept the exact location of the forthcoming wildcat shrouded in secrecy, however one can assume fairly confidently that it will avoid drilling in disputed waters.
- Mzarabani-1 (Zimbabwe)
Arguably the most disputable project in our Top 5 ranking, Zimbabwe has no known hydrocarbon reserves and has routinely relied on other neighboring countries to cater for its energy needs. This year, however, might alter that picture completely as appraisal activity heats up in the African nation’s Rufunsa Basin. The operator of the SG 4571 block, Invictus Energy, has had seismic surveying programs in 2020-2021 and now is stating its readiness to drill the Mzarabani-1 prospect in Zimbabwe, a 4-way dip closure spread across more than 200km2. The wildcat will be drilled in October-November 2021 to a total depth deeper than 4000m and will aim to confirm the prospect’s prospective resources of 4.5 TCf. According to the operator, the total assessed reserves of the SG 4571 stand at 9.25TCf and 294 MMbbls. Mzarabani will be Zimbabwe’s second-ever wildcat, the first was drilled in 2018 and deemed dry, only confirming the high-risk nature of Zimbabwean drilling.
By Viktor Katona for Oilprice.com
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