KUALA LUMPUR, Nov 22 (Bernama) -- Investment in oil and gas exploration has plummeted two-thirds in the last decade, but according to Wood Mackenzie's latest Horizons report, the sector remains crucial for decarbonisation and providing advantaged barrels in the energy transition.
The report, titled "No country for old fields: Why high-impact oil and gas exploration is still needed" reveals that there are sufficient existing resources to meet global demand, with approximately three trillion barrels of oil equivalent (boe) in inventory, offering more than 45 years of oil and over 60 years of gas supply.
The report further explained that lowering scope 1 and 2 emissions, or those created in the extraction and refining process, is better served by finding new fields than by cleaning up old ones as new fields are cleaner, due to modern decarbonisation technologies and higher facilities throughput.
New fields, leveraging modern decarbonisation technology, emit less carbon than older fields. For example, new fields starting production in the coming years will average 17 kilogrammes of carbon dioxide equivalent per barrel of oil equivalent (kgCO2e/boe), significantly lower than the 28 kgCO2e/boe from mature fields.
Wood Mackenzie Senior Vice President, Energy Research, Andrew Latham commented that exploration through the current decade is on track to provide 12 per cent of global oil and gas supply.
“If we assume that these new fields displace existing supply options with emissions intensity typical of older fields, then global scope 1 and 2 emissions in 2030 would be cut by around six per cent, or 100 Mtpa CO2e,” he said in a statemet.
Exploration also presents economic advantages, with new field discoveries providing high returns. Wood Mackenzie highlights that full-cycle returns from exploration have been consistently in double digits every year since 2015, averaging 15 per cent, with new discoveries creating over US$160 billion in value. (US$1=RM4.46)
Meanwhile, frontier and deepwater exploration, offers significant resource potential, with deepwater projects yielding much higher recovery per well and lower emissions intensity. The report noted that deepwater will offer most new opportunities for exploration as most of the world’s deepwater basins, in waters from 400 metres (m) to over 3,000m, are barely drilled.
Despite a perception problem that exploration harms the climate, the report underscores its role in decarbonising oil and gas supply, showing that there are still abundant untapped resources to be found, especially in deepwater basins.
Wood Mackenzie is the global insight business for renewables, energy and natural resources, with a team of over 2,000 experts operate across 30 global locations, inspiring customers’ decisions through real-time analytics, consultancy, events and thought leadership.
-- BERNAMA
