Press Release

Global Top 10 Emerging Oil and Gas Exploration and Production (E&P) Markets


January 17th, 2013

Global Information Inc. would like to present a new market research report, "Global Top 10 Emerging Oil and Gas Exploration and Production (E&P) Markets - Market Analysis, Investment Scenario and Production Forecasts to 2020" by GlobalData.

Deepwater Drilling in the Gulf of Mexico Nearing Pre-Blowout Levels

Deepwater drilling in the US Gulf of Mexico (GoM) is expected to return to the levels recorded before April 2010. The US Bureau of Safety and Environmental Enforcement (BSEE) granted 61 new deepwater well drilling permits between March 2011 and February 2012, which was only six fewer than the amount recorded over 2009 and 2010. With 117 new drilling permits issued up until September 2012, it appears possible that deepwater drilling permits in the GoM will have reached the same level as in 2009 by the end of 2012.

The figure below illustrates the new deepwater drilling permits issued for the GoM between 2009 and September 2012.

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The 117 new drilling permits issued up until September 2012 was a high total, considering that in 2011 and 2010 the US government issued 79 and 74 new permits, respectively. The number of permits issued in 2010 and 2011 was low due to the deepwater horizon incident and the subsequent six month moratorium imposed by the US government on drilling in certain areas of the GoM. According to BSEE, the average approval time for a new deepwater well permit in 2009 was nearly 46 days. The approval time more than doubled to 97 days between March and September 2011. However, the average time declined to 62 days between September 2011 and March 2012, demonstrating a reduction in approval times and a gradual return to pre-blowout levels.

Eagle Ford Shale an Emerging Major Crude Oil Production Hub in the US

The Eagle Ford shale is a sedimentary shale rock formation spanning 23 counties in south and east Texas in the US. Core counties in the Eagle Ford shale play include the Gonzales, Webb, and De Witt counties. The play is around 400 miles long and 50 miles wide and stretches across Texas from the Mexican border, covering around 20 fields in the Eagle Ford shale. Some of the most promising prospective oil and gas fields in the Eagle Ford shale include the Eagleville, Hawkville, Briscoe Ranch, Giddings, De Witt, Gates Ranch, and Sugarkane fields.

In recent years, a number of oil and gas companies have identified the Eagle Ford shale as a lucrative destination due to the increasing production of crude oil at the site. The northern part of the Eagle Ford play is endowed with abundant crude oil resources. Since 2008, the development of the crude oil window at the Eagle Ford play has increased considerably, due primarily to the disparity between crude oil and natural gas prices. Some of the oil fields in the Eagle Ford play with the most potential include Eagleville, Briscoe Ranch, Giddings, Dilworth, Pilgrim, and Flashing. The Eagle Ford play is comprised largely of condensates and dry gas resources.

The Eagle Ford shale has an average thickness of around 250 feet (ft) and is situated between the Austin Chalk formation and Buda Lime formation at average depths of between 4,000ft and 12,000ft.

Canada has Third Largest Proved Oil Reserves in the World, of which more than 96% is Oil Sands

Oil sands are located in a number of regions of the world such as Canada, Russia, the US and Venezuela. Canada possesses the largest oil sand deposits worldwide. Oil sands are a key strategic natural resource in Canada, most of which are located underneath sections of muskeg soils, prairie lands and boreal forests.

According to the BP Plcs Statistical Review of World Energy 2012, Canada is ranked third in the world in terms of proved oil reserves. The country recorded 175.2 billion barrels (bbl) of proved oil reserves at the end of 2011, of which 169.2 billion bbl of reserves were available as oil sands. It is also estimated that 25.9 billion bbl of proved oil sands reserves were under development in Canada at the end of 2011. This implies that Canada still has substantial scope to further extract oil from its oil sands reserves in future.

Oil sands in Canada are located primarily in the western part of the country in the Athabasca, Cold Lake and Peace River deposits. Apart from Fort McMurray in the Athabasca deposit, oil sands are generally found at greater depths (generally greater than 200ft). Near Fort McMurray, oil sands are found at the surface.

Santos Basin Holds Highest Volume of Hydrocarbon Reserves within the Brazilian Subsalt Region

The Santos basin is one of the most prominent basins for subsalt Exploration and Production (E&P) in Brazils offshore region. The basin represents the highest estimated volume of hydrocarbon reserves within the Brazilian subsalt region. As of October 2012, 43 active new exploration and extension blocks exist in the basin, representing a total of 22,424.8km2 of active exploration acreage. BM-S-11, BM-S-8, BM-S-10, BM-S-9, BM-S-24, BM-S-8, BM-S-29, BM-S-21 and BM-S-12 are some major active exploration blocks in the Santos basin.

As of October 2012, 98 blocks are in the planning stages for exploration activities in the Santos basin. These blocks represent a total acreage of 27,315km2. S-M-625, S-M-746, S-M-1000, S-M-1002, S-M-986, S-M-998, S-M-1113, S-M-1115 and S-M-1127 are some of the key blocks planned in the Santos basin.

In 2007, a consortium of Petrobras SA, Petrogal and BG Group discovered substantial oil reserves in the Tupi field in the Santos basin. Following this, several discoveries have been made in the basin including Iracema, Iara, Libra, Carioca, Franco and Guara. The Tupi discovery alone represents estimated reserves of between five and eight billion bbl of oil. Iracema represents an estimated 1.8 billion barrels of oil equivalent (boe) of recoverable reserves.

Venezuela is the Second Largest Developer of Extra Heavy Oil Reserves Worldwide after Canada

Venezuela is the second largest developer of extra-heavy oil reserves in the world after Canada. Unconventional oil reserves in Venezuela are technically not considered as bitumen reserves but rather as extra-heavy oil reserves. Although Venezuelas unconventional reserves have very low American Petroleum Institute (API) gravity, they are not as degraded as Canadian oil sands. Furthermore, Venezuelas unconventional deposits have high temperatures ranging from 40 to 50 degrees Celsius, compared to freezing temperatures in Alberta, Canada. Due to these high temperatures, Venezuelas unconventional deposits have higher viscosity and are easier to extract than deposits in Canadian oil sands.

A major difference between the Canadian oil sands and Venezuelan extra-heavy oil deposits is the lack of technology and capital for the construction of heavy oil refineries and upgraders. Although Venezuela has made attempts to attract foreign investments to the extra-heavy oil industry in the country, the initiative was only partly successful due to the renationalization of the oil industry in the country in 2007. After Venezuela made attempts to attract foreign investments, major International Oil Companies (IOCs) such as Statoil ASA and ExxonMobil entered into partnerships with the Venezuela National Oil Company (NOC), Petroleos de Venezuela, SA (PdVSA), for extra-heavy oil projects in the Ornico oil belt. However, following renationalization in 2007, a mandate was introduced for new joint ventures with a minimum of 60% stake for PdVSA. As a result, companies such as ConocoPhillips and ExxonMobil withdrew from their heavy oil operations in Venezuela. On the other hand, some companies such as Total SA and Statoil have chosen to continue the development of their projects in partnership with PdVSA.

Substantial Foreign Direct Investment for the Colombian Petroleum Sector over Recent Years

As a result of the strength of global demand for Colombian commodities such as oil and gas, the country has also been able to attract substantial Foreign Direct Investment (FDI) in the petroleum sector. Many oil and gas companies have invested in the country, such as Chevron Corporation, Pacific Rubiales, Gran Tierra Energy and Petrominerales.

Colombias petroleum sector is expected to observe a continued flow of FDI into the petroleum sector in future, as demand for oil and gas is expected to continue to increase in the global market. In December 2011, Chevron renewed an agreement with PdVSA in 2007 for the supply of gas from Colombia to Venezuela. This extension of the agreement indicated that foreign investors continue to be optimistic about the prospects of Colombias petroleums sector.

Poland and France are Key Geographical Locations for Shale Gas Development in Europe in Terms of Resource Potential

Global technically recoverable shale gas resources amount to an estimated 185 trillion cubic meters (tcm). China holds the largest estimated shale gas resources, accounting for 19% of the global total. Of all countries worldwide, the US probably has the most accurately estimated resources, accounting for 13% of the global total. European countries with known shale gas reserves account for a collective share of almost 10% of the global total.

Shale gas development within Europe is currently limited to estimates of potential resources in place. With technology advancing and new information becoming available, the regions estimates are also changing over time. Drawing inspiration from shale success in the US, European countries are optimistic about their own domestic reserves. However, differences in rock formations and shale characteristics to those in the US will be key challenges faced by European countries.

Shale gas exploration activities in Europe are currently largely confined to Austria, Germany, Hungary, Ireland, Poland, Sweden and the UK. More than half of the estimated shale gas reserves in the region are located in Poland and France. Poland possesses overall technically recoverable reserves between 346 billion cubic meters (bcm) and 768bcm, whereas France possesses estimated shale gas reserves of five tcm.

Western Siberian Basin Considered the Largest Petroleum Basin in the World

Of the 33 oil and gas provinces in the Arctic region, the majority of resources are located in basins in Amerasia, Arctic Alaska, east Barents, east Greenland, west Greenland east Canada, east Greenland Rift, west Siberian and Yenisey-Khatang. These seven basins account for an estimated share of more than 80% of undiscovered oil and gas resources in the Arctic region.

The western Siberian basin is considered the largest petroleum basin in the world, representing approximately 132.57 billion boe. The basin covers an area of around 2.2m km2. According to the United States Geological Survey (USGS), the amount of technically recoverable resources in the basin is estimated at around eight billion bbl of crude oil, 670 trillion cubic feet (tcf) of natural gas and 21 billion bbl of Natural Gas Liquids (NGL). Exploration activities in the basin have resulted in the discovery of 10 oil and gas fields. Of these discoveries, Urengoy gas field and Samotlar oil field are some of the largest. Urengoy gas field is the largest discovery, representing more than 350tcf of estimated reserves. Samotlar oil field contains an estimated 28 billion bbl of oil.

The Arctic Alaska basin holds the largest estimated oil deposits in the region, with approximately 30 billion bbl of oil. The second largest oil province is the Amerasia basin, which possesses approximately 9.72 billion bbl of crude oil. The east Greenland Rift basin is the third largest oil province, containing an estimated 8.9 billion bbl of crude oil.

Angola and Ghana Lead Deep Offshore Oil and Gas Exploration in West Africa

The systematic exploration of hydrocarbons in the deepwater regions of offshore Africa started in the Congo basin in 1994. Deepwater oil and gas activity in West Africa extends from Mauritania to Angola.

Angola is the most important country for the exploration of oil and gas in deep offshore West Africa. Of the 52 oil and gas discoveries made in offshore West Africa between 2009 and September 2012, Angola accounted for 18 or 34.6% of the total discoveries made in West Africa. The abundance of oil and gas reserves in offshore areas has helped Angola to emerge as one of the most important countries in Africa for the exploration of oil and gas. After Angola, Ghana recorded the second largest number of discoveries between 2009 and September 2012. 13 discoveries were made in the country during this period.

Crude oil was first discovered in Angola in the 1970s. The countrys initial oil discoveries were made in the offshore Kwanza basin. Later, offshore regions accounted for the majority of oil and gas discoveries in the region. Aside from its shallow and deep offshore regions, discoveries are being made in Angola even in ultra deep and pre-salt regions.

Mozambique and Tanzania Lead East Africa in terms of Number of Oil and Gas Discoveries up until September 2012

Mozambique and Tanzania lead East Africa in terms of the number of discoveries made up until September 2012, with six discoveries in each country. Two discoveries were made in Kenya in the same period.

Up until September, six natural gas discoveries were made in Tanzania in onshore and offshore areas in 2012. Most of these discoveries were made in the offshore region of the Mafia, Mandawa and Ruvuma basins. BG Group has been involved in exploration activities that have resulted so far in the discovery of five offshore natural gas reserves in Tanzania. These discoveries include Jodari-1 and Mzia-1 in block 1. Statoil ASA and ExxonMobil Exploration and Production Tanzania Limited are involved in exploration discoveries including Lavani and Zafarani-1 in block 2.

In Mozambique, the majority of oil and gas discoveries have been made by Anadarko Petroleum Corporation and ENI SpA, primarily in exploration areas 1 and 4. Anadarko Petroleum Corporation has made eight discoveries in Mozambique, in the Rovuma basins exploration area 1. Most of the discoveries related to natural gas reserves. ENI has made four natural gas discoveries in exploration area 4, located in offshore Mozambique.

Two oil and gas discoveries were made in Kenya up until September 2012: Mbawa 1 and Ngamia-1. Tullow Oil plc made both discoveries.


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