Industry Trend Analysis - Atlantic Margin Focus Of 2018 Exploration - MAR 2018

BMI View: Frontier exploration led by the oil majors will focus on the Atlantic margin in 2018. Brazil, Mexico and the MSGBC basin continue to hold some of the best exploration potential.

2018 is unlikely to see significantly more exploration than 2017, despite the recent run in oil prices. In our view, the bulk of the industry will continue to manage decline rates at existing projects and cherry pick the best new projects from current portfolios. For the time being, we see potentially better profits from higher oil prices being prioritised to investors, rather than redirected towards aggressive increases in exploration activity ( see ' Brighter Market To Boost Shareholder Returns ' , December 7).

That said, companies are still targeting major resource plays to develop reserves growth and frontier exploration remains at the forefront of plans. In 2017, we estimate around 68 high-impact wells (+100mn boe resource) were drilled and we expect that number to remain constant this year.

Offshore Exploration Flat
Estimated* Wells Targeting +100mn boe
* based on publically avaliable information. f = BMI forecast. Source: BMI

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