Global oil and gas exploration is set to falter this year as the number of licensed blocks and total acreage fall to near all-time lows as the sector struggles to recover from the Covid-19 pandemic and the ensuing oil market crash, Rystad Energy said last week.
Only 21 lease rounds were completed worldwide through August this year, half as many held during the same time last year. The acreage awarded so far this year has shrunk to a 20-year low of 320,000 square kilometers. Global lease rounds are expected to total 44 this year, 14 less than in 2021 and the lowest level since 2000, Rystad said.
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The onshore exploration sector is a significant contributor to the decline in awarded acreage, according to Rystad. Total onshore acreage awarded in leasing activity has plummeted from more than 560,000 square kilometers in 2019 to a mere 115,000 square kilometers so far this year. Offshore leased acreage also hit a high point in 2019 before posting a big drop in 2020 and has remained relatively flat in the past two years.
Concluded lease rounds this year have dropped significantly in Russia, the U.S. and Australia. These countries have held five lease rounds so far this year – three in Russia and one each in the U.S. and Australia – down from 17 rounds in the first eight months of 2021 (eight in Russia, five in the U.S. and four in Australia). The drop in the U.S. is primarily driven by the cancellation of Lease Sales 259 and 261 in the Gulf of Mexico and Cook Inlet in Alaska.
Drilling into the awards