Development Trend of Global Oil and Gas Upstream Industry

In the first quarter of 2022, international oil prices showed a high and volatile trend after a sharp rise. The average price of Brent crude oil futures was US$97.90 per barrel, up 22.89% month-on-month and 59.65% year-on-year. Among them, the average daily price of Brent rose to $127.98 per barrel on March 8, the highest since July 2008. In the second quarter, international oil prices are expected to fluctuate at a high level, with the average price of Brent crude oil futures in the range of $100/barrel to $110/barrel.

(Source: WeChat public "Energy Magazine" Author: Su Jiachun is the chief researcher of the Petroleum Economics Research Office of the CNOOC Energy Economics Research Institute Li Wei is the senior researcher of the Natural Gas Economics Research Office of the CNOOC Energy Economics Research Institute Kong Yinghao is the CNOOC Energy Economics Research Office Researcher, Natural Gas Economic Research Office of the Academy)

Global natural gas prices rose sharply year-on-year. The average prices of Northeast Asian spot, European TTF, and American Henry Hub were 31.22, 32.49, and 4.67 US dollars/million British thermal, respectively, down 10.9%, 1.5%, and 2.3% month-on-month, and up 215.0%, 397.6%, and 55.1% year-on-year. Among them, on March 7, the spot price of LNG in Northeast Asia exceeded US$80/million British thermal, a record high. In the second quarter, it is expected that the Northeast Asian spot and European TTF prices will decline, and the Henry Hub price in the United States will remain high.

Global oil and gas exploration trends

Most exploratory wells are drilled onshore, and offshore exploratory wells have great potential for resources

According to Rystad's statistics and forecasts, the number of conventional exploration wells in the world will reach 2,979 in 2022. There are 1,870 conventional exploration wells in China, accounting for about 72.8% of the world's total. There are 961 populations outside China, of which 67% are onshore, mainly in Russia (223), India (79) and Turkey (48); 33% by sea, mainly in Norway (40) , India (36) and the United States (25). Exploration wells that have great influence on the global oil and gas exploration situation mainly include the following five categories: (1) exploration in frontier areas, (2) development of new areas, (3) exploration in emerging basins, (4) huge resource prospects, (5) companies Focus on the key points.

According to the above criteria, there will be about 30 high-impact exploration wells in the world in 2022, with a potential oil and gas resource of 13 billion barrels of oil equivalent; they are mainly distributed in Africa and the Americas, of which 8 are in Africa, 6 are in South America, and 5 are in North America. The equatorial regions of West Africa and South America have received the most attention; 24 exploration wells are located offshore, of which 22 are deepwater and ultra-deepwater exploration wells; at the same time, 33% of the high-impact exploration wells are operated by Eni, Shell, ExxonMobil and International oil companies such as Total show that high-risk, high-reward exploration wells are still favored by large companies.

In the first quarter, 612 conventional exploration wells were completed worldwide, accounting for 20.5% of the annual plan. China has completed 479 transactions, accounting for 78.3% of the world's total. Outside China, 136 contracts have been completed, which is basically the same as the level of the same period last year (133 contracts), but much lower than the level of the same period in 2020 (172 contracts); among them, 23.5% are offshore and 76.5% are onshore.

Offshore oil and gas discoveries account for over 90%, and oil discoveries account for 80%

Rystad statistics show that in the first quarter, the global conventional oil and gas discovered resources were about 2.3 billion barrels of oil equivalent, which was 91.3% higher than the same period last year; of which, natural gas accounted for 20% and oil accounted for 80%. Offshore oil and gas discoveries accounted for about 91%, of which ultra-deep water above 1,500 meters accounted for 45%, 125-1,500 meters water depth accounted for 31%, and shallow water below 125 meters accounted for 14%; onshore oil and gas discoveries accounted for only 9%. Major global oil and gas discoveries include the Venus ultra-deepwater oilfield in Namibia, the Krabdagu deepwater oilfield in Suriname, and the Lau Lau and Fangtooth ultra-deepwater oilfields in Guyana. The top oil companies in the world according to the amount of discovered resources during the year are: Total, Exxon Mobil, Qatar National Oil Company, and American Amerald Hess Company.

Exploration investment increased slightly, oil and gas discovery cost at historical position

According to Rystad's forecast, global oil and gas exploration investment in 2022 will be about US$43.3 billion, an increase of about 8.3% over last year, but still significantly lower than the level of nearly US$60 billion in 2019 before the epidemic. Among them, offshore oil and gas is a hot spot for exploration investment, accounting for about 26.7 billion US dollars, accounting for about 61.7%, an increase of 22% over last year's investment.

Thanks to major offshore oil and gas discoveries, the global oil and gas discovery cost in the first quarter was about US$2.5 per barrel of oil equivalent, the lowest in the past decade, far below the level of US$7 per barrel of oil equivalent last year.