INTERNATIONAL FORECAST: SOME NOTICEABLE RECOVERY IS FINALLY UNDERWAY

The vast majority of countries outside the United States should see an increase in the number of new wells drilled this year. By the same token, some analysts see global oil and gas exploration shrinking this year, as companies continue to struggle with the Covid-19 pandemic and international energy crises, including the Russian invasion of Ukraine. 

Fig. 1. This is the latest rendering of the FPSO design for Equinor’s proposed Bay du Nord field development offshore Newfoundland and Labrador. Image: Equinor.

However, some industry professionals, like Schlumberger Chief Executive Officer Olivier Le Peuch, think the demand for reliable energy will accelerate the global oil exploration and production industry, Reuters reported. “The need for reliable energy supply and reinvestment in our industry remains very compelling, and will ultimately extend the growth cycle, both in terms of duration and magnitude,” Le Peuch said at the JP Morgan Energy Conference in New York, according to the Reuters report. 

Indeed, Halliburton Chairman, President and CEO Jeff Miller shares Le Peuch’s enthusiasm. “I think the fundamentals today really support a multi-year energy up cycle,” Miller told World Oil. “I think we’re at a point in time, where the industry has suffered eight years of underinvestment, and that can only be overcome with some period of time of overinvestment, which I think is longer rather than shorter.” (For more of World Oil’s exclusive interview with Mr. Miller, please turn to page 48.) 

Drilling outside the U.S. during 2021 was barely higher than the 2020 level, gaining just 0.6%. However, World Oil projects the number of wells drilled outside the U.S. in 2022 will increase 12.4% during 2022, as the upstream industry continues to recover. Every region will experience higher drilling levels this year, save for Western Europe, and even that area will be down just 1.8%. 

On the production front, worldwide output of crude and condensate staged a small recovery last year. After dropping to 76.244 MMbopd during 2020, global production gained 1.5% last year, to average 77.412 bopd. Improvement was noted in five of the eight regions that World Oil tracks. 

Fig. 2. The Liza Destiny FPSO, which is now operating offshore Guyana for ExxonMobil and Hess. Image: Hess Corp./Stabroek News.

Given the reduced drilling levels experienced over much of the globe, it’s no surprise that worldwide crude and condensate reserves dropped nearly 1% to 1.628 trillion bbl, with six of eight regions sustaining declines. Meanwhile, natural gas reserves held up better, staying nearly even at 7,240 Tcf. Please read forward for discussions of activity in the eight global regions.