Historically offshore oil and gas production has been concentrated in regions like North America and NW Europe, which together account for 52% of world active offshore fields. However, to supply growing demand and offset decline in mature fields, offshore oil and gas companies are today exploring prospects in previously untouched regions, basins and plays: hydrocarbon frontiers.
The Graph of the Month illustrates the emergence of 4 such offshore frontier regions since 2008. The South Atlantic Margin, including Brazil and conjugate pre-salt basins in West Africa (Gabon, Congo, Angola and north Namibia) is the most established of the new frontiers, accounting for 13 discoveries back in 2008, rising to a peak of 27 in 2011. The Levantine Basin in the eastern Mediterranean, apportioned between Israel, Cyprus and soon Lebanon, has seen 2 discoveries in each of 2011, 2012 and 2013-to-date, though following gas finds like Leviathan and Aphrodite, explosive growth is likely.
The Equatorial Margin frontier, including French Guiana, Liberia, Sierra Leone, Ivory Coast and Ghana, mostly consists of cretaceous fan plays. The region has exhibited a rapid growth in exploration activity, with 10 discoveries in 2011 and 11 in 2012, compared to just 2 in 2008. The East African offshore frontier (Mozambique, Tanzania and Kenya) began to emerge in 2010 and 2011, with significant discoveries like the Prosperidade and Mamba gas-rich turbidite sand complexes giving impetus to exploration such that discoveries in 2012 increased by 150% year-on-year to 10. In total, the 4 frontiers in 2008 accounted for 16 discoveries, or 10% of global offshore finds; in 2012 their 46 discoveries represented 33% of world offshore finds.
Plumbing the Depths
The main thing these frontiers have in common is water depth. The mean water depth of discoveries made in these areas since start 2008 is 1,489m. Of the 173 discoveries, 86 (49.7%) were made in ultra-deep waters of more than 1,500m. These areas account for 59.7% of global ultra-deep finds in the period. Moreover, there has been a clear trend upwards since 2010. The mean water depth on a yearly basis has risen from 1,000m to 1,609m in 2012, with 2013 on track to roughly equal 2012. The only area of those featured with a significant number of shallow water discoveries is the South Atlantic Margin, with 40 (36.7%) finds in less than 500m, mostly minor Brazilian fields. East Africa, where exactly 50% of discoveries have been ultra-deep, has the highest mean water depth for discoveries in the period, at 1,533m.
Mapping the Future
Global demand for hydrocarbons continues to grow: oil demand rose 45% in non-OECD countries 2002-12, reaching 43.6m bpd. Given this trend, the evidently favourable geology and the advancing state of deepwater technology, the exploration and development potential of these 4 offshore frontiers augurs well for not only pioneering E&P companies, the majors and national oil companies who have started to work the frontiers, but also shipyards and owners of high-spec units capable of operating in ultra-deep waters.