The upstream segment of the oil and gas industry contains exploration activities, which include creating geological surveys and obtaining land rights, and production activities, which include onshore and offshore drilling. Upstream exploration trends are constantly changing, and it’s important to stay on top of them. The following list describes in brief, different methods and types of upstream exploration as well as looking at trends facing the industry today:
Deepwater exploration is a high-risk, high-reward business. Deepwater drilling is more expensive than shallow water drilling, which means that you need to be sure that your well will be successful before investing in it. The costs of deepwater drilling are also higher because special equipment and tools are required to work under extreme pressure at great depths below sea level.
Because of these risks, many companies have been hesitant to invest in deepwater exploration over the past few years as oil prices have fallen–but now that prices are beginning to rise again (and they’re expected to continue rising), companies may be more willing than ever before to take their chances on this type of business venture.
Over the next five years, there is expected to be an increase in exploration activities in shallow water. Shallow water refers to areas that are less than 100 meters deep and often overlooked as a resource due to high costs associated with drilling and production. However, with advances in technology and cost reductions over time, it has become more feasible for companies to explore this area of interest.
There are several reasons why companies may choose this option:
- Shallow water fields can produce oil at rates comparable with those found in deepwater fields; they do so at lower cost per barrel since infrastructure isn’t needed as much (i.e., pipelines). This makes them more profitable than conventional offshore drilling operations.
- They have access points closer to shorelines where infrastructure already exists which helps reduce risks associated with transportation by sea or land versus transporting materials from remote locations such as deepwater regions far away from landmass boundaries like those found along continental shelves where most major discoveries occur today.”
Staying Active in the Middle East and Africa (MENA)
The Middle East and Africa (MENA) is a key region for upstream exploration. While the region’s oil production has been declining since 2015, it’s expected to increase in the coming years. This could mean more opportunities for companies looking to explore in this area.
The MENA region has been rich in hydrocarbons for decades; however, exploration activity has been limited due to political instability and security concerns. But with countries like Saudi Arabia investing heavily into their upstream operations over the past few years, there should be plenty of opportunity for companies looking to get involved with new wells or redeveloping existing ones.
Upstream exploration trends.
- Oil and gas exploration is a long-term process. In oil and gas exploration, you don’t just drill a well and hit oil in your first attempt. It takes time to build a case for finding oil or gas resources, which can take years of research and exploration before drilling commences.
- Oil and gas exploration is expensive. Even if you have all the right assets to do an offshore or onshore project, it’s still going to cost millions or billions of dollars depending on how large your project is going to be (e.g., deepwater vs shallow water).
- Oil and gas exploration is risky – there are so many variables that go into making sure that your investment is successful: geology; weather conditions; available infrastructure such as roads/railroads/airports; political issues such as war zones where there might be security concerns around doing business there safely without getting shot at by rebels who don’t want foreigners coming into their territory…the list goes on!
- There are many moving parts when conducting upstream operations: deciding whether or not there really IS oil underneath those rocks? Or maybe someone else has already done this work before us so we’ll just use their data instead? What kind of equipment do we need? Who should we hire? How much time will each step take before we start seeing results back from our tests?”
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