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Monday, October 23, 2017

Global Drilling Expected To Bounce Back In 2000

January 28, 2000

World drilling activity for oil and gas fell 24 percent in 1999 from 1998, but levels should bounce back in 2000, IHS Energy Group said. "In 2000, I expect levels to reach at least those of 1998," said Ian Cross, Asia director for IHS, who produced an IHS report on world drilling activity in 1999. "Some areas in 2000 will be slow to catch up. I think the Far East will be one of them. There is less money going into this region," he said. IHS said it estimated 7,433 exploration and delineation wells were completed in 1999, compared with around 9,800 in 1998. Exact figures for Russia, onshore China and India were not available, IHS said. "The fall of 24 percent was much lower than expected at the halfway mark of the year, largely as a result of the second half upturn experienced in North America," the report said. At the start of 1999, oil prices stood at less than $10 per barrel basis Brent, but rose to more than $25 by the end of the year, IHS said. The report focused on the number of wells completed in exploration and delineation drilling. These are the wells drilled to make initial oil and gas discoveries and to discover the extent of a field. The report did not count development wells or take into account seismic work. Development wells are drilled on fields with proven reserves and seismic surveys are carried out to discover oil-bearing geology. "The surge in oil price was reflected by an increase in exploration work in the latter part of 1999 following a very depressing first six months," the IHS report said. IHS said 3,458, or 47 percent of the wells, were drilled in Canada and 1,493, or 20 percent, were drilled in the United States. The Far East was the most active area outside of North America at 1,010, or 14 percent, inflated by activity by state oil firms in China and India. The report said 334 wells, or 4.5 percent, were completed in Latin America. Europe saw 337 completions, of which most were in Romania with 100. There were 110 wells drilled in the Middle East, representing 1.5 percent of the activity. Cross said he would expect activity to bounce back in 2000 to levels seen in 1998. Brazil, West Africa, deepwater Gulf of Mexico and North America were likely to be the most active in 2000, building on their successes in 1999, Cross said. Brazil opened its petroleum sector to foreign explorers in 1999, sparking an initial signing of 12 contracts. Cross said that although East Asia would be slow to catch up, partly owing to a history of gas-prone discoveries and political uncertainties remaining in Indonesia, China bounced back into the spotlight in 1999. Phillips Petroleum Co. discovered what is being dubbed as one of Asia's largest crude fields in China's Bohai Bay. Oil in place is estimated at 2.1 billion barrels. Phillips has not announced recoverable reserves but industry estimates suggested that recoverable reserves would be 210-420 million barrels given that the oil is heavy grade. In addition Kerr-McGee Corp. discovered oil in Bohai Bay and Santa Fe Snyder Corp. discovered oil in the Pearl River Basin. - (Reuters)
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