Westwood data reveals reduced drilling in 2023

Global drilling activity in 2023 declined by 21% last year due to energy transition strategies, industry consolidation, rising well costs, and reduced activity in former hotspots, according to Westwood Global Energy Group.

Further, the energy market research and consultancy firm’s 2023 analysis reveals that the commercial success rate is down 7% from the previous year, the lowest since 2018. Fewer giant discoveries (>500 MMboe) have resulted in a year-on-year decline in the average discovery size, down from nearly 500 MMboe in 2019 to about 220 MMboe in 2023, the smallest since 2014. At the same time, overall drilling finding costs have increased by a factor of six since 2019 to $1.20/boe. The commercial success rate in frontier plays returned to the long-term average at <10%.

The findings also highlight a decrease in the number of companies participating in high impact drilling (down to 68 in 2023 from 99 in 2019), with supermajors and NOCs continuing to account for the majority of high impact well equity, at about 60% between 2019 and 2023, and leading the way in terms of both discovered resource and commercial success rate.

Recent discoveries in Namibia’s Orange basin, however, demonstrate that there are still significant volumes of hydrocarbons to be found and cycle times are reducing, with oil discoveries achieving first production, on average, a year faster than gas discoveries, Westwood said.