In a week when Shell continued its role as master of the emerging Jurassic Play, with its Rydberg discovery in deepwater GoM Norphlet, we identify and benchmark the top performing basins around the world to 2030.
The discovery marks the fourth commercial Norphlet discovery for Shell, following successes at Vicksburg B, Appomattox and Vicksburg A. We believe that Appomattox alone justifies an economic stand-alone development, with Rydberg offering high-return incremental value potential.
We estimate reserves at Rydberg to be 100 mmboe, with a valuation of US$782 million, and first production in 2022. This brings the Appomattox complex to 790 mmboe, one of the largest in the history of deepwater GoM.
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Shell discovers Rydberg (MC 525) in deepwater GoM Norphlet
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To help you assess future exploration performance elsewhere in the world, we have analysed 126 key global basins - ranging from mature onshore to frontier ultra-deepwater plays - which we expect to generate 240 billion boe by 2030.
A total exploration spend of close to US$600 billion in these basins will create over US$420 billion in additional value, net of investment. However, success will not be evenly distributed and we believe value will in fact be destroyed in 19 basins at our base price.
The majority of those with the greatest potential are in deepwater, including the Golden Triangle of Brazil, West Africa and the US Gulf of Mexico.
However, two onshore basins – Kenya's North Central Gregory Rift and Colombia's Llanos Basin – buck the trend and join these regions in our list of top 10 by value creation thanks to relatively low development costs and attractive fiscal terms.
Indeed, relatively low government take is key to significant value creation, especially when volumes are not very large, with our analysis showing that around half of the top 20 basins have a government take at or below 70%.
In terms of yet-to-find volumes, three giant gas-prone basins – Mozambique Rovuma, the Russian East and West Barents Sea – appear in the top 10, yet none are outstanding in terms of value creation due to current challenges facing gas commercialisation, particularly in an Arctic environment.
Exploration spend is expected to be highest in the US Gulf of Mexico due to the variety of opportunities and open business environment on offer. But although outlay is greatest in expensive deepwater plays, we believe the most active plays in terms of number of wells will be onshore – in Colombia, Egypt, Pakistan, Argentina and Oman.
Global Future Exploration Basin Economic Benchmarking report, shape files and data [Subscription required]
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