In an industry where a stunning 25% global exploration success rate in 2023 unlocked billions of barrels from frontiers like Guyana to Namibia, this deep dive reveals the high-stakes world of oil and gas exploration and production.
Key Takeaways
- In 2022, global exploratory drilling reached 1,850 wells, a 12% increase from 2021, primarily driven by offshore activities in the Americas.
- The success rate of exploration wells in 2023 averaged 25% worldwide, with North America leading at 35% due to shale plays.
- Offshore exploration spending hit $85 billion in 2022, accounting for 45% of total upstream exploration budgets.
- World oil production reached 99.7 million barrels per day (mb/d) in 2022, up 3.1% from 2021.
- US crude oil production hit a record 12.9 mb/d in 2023, driven by Permian Basin output.
- Saudi Arabia produced 10.6 mb/d of crude oil in 2022, 11% of global total.
- World proved oil reserves stood at 1,732.4 billion barrels at end-2022.
- Venezuela holds largest oil reserves at 303.8 billion barrels in 2022.
- Global proved natural gas reserves were 187 trillion cubic meters end-2022.
- Global drilling rigs active averaged 2,150 in 2023, up 15% YoY.
- US land rig count peaked at 630 in Oct 2023, focused on Permian.
- Horizontal wells accounted for 92% of US onshore drilling in 2023.
- Global upstream capex $580 billion in 2023, 55% production.
- Oil & gas industry revenue $5.3 trillion globally in 2023.
- Upstream EBITDA margins averaged 45% in 2023 due to $80/bbl oil.
Global exploration activity and production rose significantly, driven by high investment and oil prices.
Drilling
- Global drilling rigs active averaged 2,150 in 2023, up 15% YoY.
- US land rig count peaked at 630 in Oct 2023, focused on Permian.
- Horizontal wells accounted for 92% of US onshore drilling in 2023.
- Global jack-up rig utilization hit 92% in Q4 2023 for shallow water.
- Average US well drilling time reduced to 15 days in Permian 2023.
- Offshore drilling spend reached $150 billion globally in 2023.
- China drilled deepest onshore well at 10,268 meters in 2023.
- Middle East rig count averaged 450 in 2023, 80% directional.
- Brazil pre-salt wells drilled at 7,000m TVD, success 95%.
- Global sidetrack wells numbered 1,200 in 2023 for infill.
- Norway Barents Sea wells averaged 4,500m depth in 2023.
- US frac stages per well increased to 55 in 2023.
- Floaters utilization 85% globally in 2023 for deepwater.
- Russia drilled 18,000 wells in 2022, mostly horizontal.
- Average rig rate $350/day for US super-spec in 2023.
- Gulf of Mexico semisub rig day rates $400k in 2023.
- Automated drilling systems used in 40% of US rigs 2023.
- Global well productivity in shale up 20% since 2019.
- HPHT wells drilled increased 25% to 150 globally in 2023.
- Canada rig count 220 in 2023, 70% in Duvernay/Montney.
- Drill bits lifespan extended 50% with PDC tech in 2023.
- Africa onshore rigs averaged 180 in 2023.
- Extended reach drilling max lateral 4km in North Sea 2023.
- Multilateral wells 15% of global total in 2023.
- Rigless interventions grew 30% to 5,000 jobs in 2023.
- AI-optimized drilling paths saved 10% time in 20% rigs 2023.
Drilling Interpretation
The industry is drilling deeper, faster, and smarter—with an almost obsessive focus on efficiency—so that it can enthusiastically extract every last drop from the planet while arguing about who gets to pay for the lightbulb.
Economics
- Global upstream capex $580 billion in 2023, 55% production.
- Oil & gas industry revenue $5.3 trillion globally in 2023.
- Upstream EBITDA margins averaged 45% in 2023 due to $80/bbl oil.
- Global oil & gas employment 10.2 million direct jobs in 2022.
- US shale breakeven price fell to $45/bbl in Permian 2023.
- OPEC+ revenue from oil exports $1.1 trillion in 2023.
- LNG spot prices averaged $15/MMBtu Asia 2023.
- Major IOCs free cash flow $200 billion in 2023.
- Royalty payments to governments $250 billion globally 2023.
- US rig release costs averaged $500k per well 2023.
- Global decommissioning spend $15 billion in 2023.
- Brent crude averaged $82/bbl in 2023.
- Natural gas Henry Hub price $2.50/MMBtu avg 2023.
- Upstream M&A deals $200 billion value in 2023.
- Shareholder returns $250 billion dividends/buybacks by supermajors 2023.
- Carbon tax impact $10 billion on upstream ops in 2023.
- Service sector revenue $250 billion globally 2023.
- NPV10 of global portfolio $3 trillion at $70/bbl 2023.
- Finding & development cost $10/boe avg 2023.
- Lifting costs averaged $8/boe for supermajors 2023.
- Hedging covered 30% of 2024 production at $65/bbl avg.
- Tax take 65% of upstream profits in OECD countries 2023.
- Venture capital in oil tech $5 billion in 2023.
- Debt reduction $100 billion by E&Ps in 2023.
- WTI discount to Brent averaged $5/bbl in 2023.
- Global rig day rates up 20% to $25k/day land 2023.
- Digital twin adoption saved $2 billion in ops costs 2023.
Economics Interpretation
Even while weaning itself with billion-dollar shareholder payouts and efficiency gains, the industry remains a high-stakes, high-reward colossus, spending half-a-trillion to fuel half the world while navigating a costly pivot from the ground up.
Exploration
- In 2022, global exploratory drilling reached 1,850 wells, a 12% increase from 2021, primarily driven by offshore activities in the Americas.
- The success rate of exploration wells in 2023 averaged 25% worldwide, with North America leading at 35% due to shale plays.
- Offshore exploration spending hit $85 billion in 2022, accounting for 45% of total upstream exploration budgets.
- In 2023, Africa saw 320 new exploration wells drilled, discovering 1.2 billion barrels of oil equivalent (boe).
- Seismic surveys covered 2.5 million square kilometers globally in 2022, with 60% focused on frontier basins.
- US exploratory wells numbered 4,200 in 2022, yielding a 28% success rate in Permian Basin.
- Brazil's pre-salt exploration led to 15 discoveries totaling 3 billion boe in 2021-2023.
- Global exploration investment rose to $120 billion in 2023, up 15% YoY amid high oil prices.
- Norway's Barents Sea exploration yielded 500 million boe discoveries in 2022 from 25 wells.
- Asia-Pacific exploratory drilling fell 8% to 450 wells in 2022 due to geopolitical tensions.
- Conventional exploration success rate dropped to 18% globally in 2023, versus 32% for unconventional.
- Guyana's exploration campaign discovered 11 billion boe since 2015 from 10 wells.
- Middle East exploratory wells totaled 180 in 2022, with 40% success in Saudi Arabia.
- 3D seismic data acquisition increased 20% to 1.2 million km² in 2023 for deepwater targets.
- Australia's offshore exploration licenses issued 15 new blocks in 2023, targeting 5 Tcf gas.
- Russia drilled 650 exploratory wells in 2022, discovering 800 million boe onshore.
- Mexico's exploration in Sureste Basin led to 2 billion boe finds in 2022-2023.
- Global wildcat wells numbered 1,100 in 2023, with average depth of 3,500 meters.
- Namibia's offshore exploration discovered 2.5 billion boe in 2022 from 4 wells.
- Europe's exploration spending was $12 billion in 2022, focused on North Sea extensions.
- China's exploratory drilling reached 450 wells in 2022, success rate 22% in Tarim Basin.
- Argentina's Vaca Muerta exploration added 1.5 billion boe reserves in 2023.
- Global exploration M&A deals totaled $25 billion in 2023 for acreage swaps.
- Indonesia drilled 120 exploratory wells in 2022, discovering 400 million boe.
- Canada's Arctic exploration saw 8 wells drilled in 2023, 25% success rate.
- Egypt's exploration in Mediterranean yielded 1 billion boe in 2022.
- Frontier basin exploration accounted for 15% of global budgets at $18 billion in 2023.
- US Gulf of Mexico deepwater exploration discovered 600 million boe in 2023.
- UK's North Sea exploration wells dropped to 20 in 2022, success 30%.
- Global exploration risk index averaged 1.2 in 2023, indicating moderate prospectivity.
Exploration Interpretation
Despite global exploratory drilling hitting a feverish 1,850 wells in 2022—driven by offshore gambles and spending splurges—the sobering reality is that our collective success rate is a humbling 25%, a stark reminder that while we're chasing giants like Guyana's incredible 11-billion-barrel bonanza, we're mostly just digging very expensive, very deep holes.
Production
- World oil production reached 99.7 million barrels per day (mb/d) in 2022, up 3.1% from 2021.
- US crude oil production hit a record 12.9 mb/d in 2023, driven by Permian Basin output.
- Saudi Arabia produced 10.6 mb/d of crude oil in 2022, 11% of global total.
- Global natural gas production was 4,047 billion cubic meters (bcm) in 2022, up 0.7%.
- Russia oil production averaged 10.1 mb/d in 2022 before sanctions impacted 2023.
- LNG production globally reached 404 million tonnes per annum (mtpa) in 2023.
- Brazil's oil production grew 8% to 3.2 mb/d in 2023 from pre-salt fields.
- Norway produced 2.0 mb/d oil equivalent in 2022, 95% from offshore.
- Canada's oil sands production was 3.3 mb/d in 2023, 55% of national output.
- UAE oil production stood at 3.4 mb/d in 2022, with gas at 72 bcm.
- Permian Basin production reached 5.9 mb/d oil in Oct 2023, 46% of US total.
- Qatar LNG capacity hit 77 mtpa in 2023, producing 80 bcm gas equivalent.
- Iraq produced 4.5 mb/d oil in 2023 despite OPEC+ cuts.
- Australia's LNG exports were 81 mtpa in 2022, world's largest.
- Nigeria's oil production averaged 1.4 mb/d in 2023, hampered by theft.
- Global shale oil production contributed 10 mb/d in 2023, 60% from US.
- Kazakhstan Tengiz field produced 570 kb/d oil in 2023 post-expansion.
- Angola offshore production was 1.1 mb/d in 2022, declining 5%.
- US natural gas production record 103 bcf/d in 2023.
- Iran produced 3.8 mb/d oil in 2023 despite sanctions.
- Guyana started production at Liza 1 at 160 kb/d in 2020, ramping to 460 kb/d by 2023.
- Oman oil production 1.0 mb/d in 2023, gas 40 bcm.
- Argentina Vaca Muerta shale oil hit 250 kb/d in 2023.
- Global oil production from enhanced recovery methods was 25% of total in 2022.
- Algeria produced 1.0 mb/d oil and 95 bcm gas in 2022.
- Egypt gas production 58 bcm in 2023 from Zohr field.
- Colombia oil production 780 kb/d in 2023.
- UK North Sea production 1.3 mb/d oe in 2022, declining.
Production Interpretation
The world's thirst for fossil fuels hit a near-record high in 2023, proving that while the energy transition is being debated in boardrooms, it's still being powered by traditional barrels and cubic meters on the ground.
Reserves
- World proved oil reserves stood at 1,732.4 billion barrels at end-2022.
- Venezuela holds largest oil reserves at 303.8 billion barrels in 2022.
- Global proved natural gas reserves were 187 trillion cubic meters end-2022.
- Saudi Arabia oil reserves 267.0 billion barrels, R/P ratio 52 years in 2022.
- Russia proved oil reserves 107.8 billion barrels end-2022.
- Iran oil reserves 208.6 billion barrels, 12% of world total.
- US technically recoverable shale oil resources estimated at 78.2 billion barrels.
- Canada oil sands reserves 166.3 billion barrels bitumen end-2022.
- UAE oil reserves 111.0 billion barrels, gas 6.1 tcm.
- Kuwait reserves 101.5 billion barrels oil end-2022.
- Iraq oil reserves 145.0 billion barrels in 2022.
- Brazil pre-salt reserves certified at 15.9 billion boe end-2023.
- Qatar gas reserves world's third largest at 23.9 tcm end-2022.
- Norway proved reserves 5.5 billion barrels oil equivalent end-2022.
- Global 2P reserves increased 2% to 2,500 billion boe in 2023.
- Australia gas reserves 3.8 tcm, mostly unconventional.
- Libya oil reserves 48.4 billion barrels end-2022.
- Nigeria oil reserves 36.9 billion barrels, gas 5.3 tcm.
- China proved oil reserves 26.0 billion barrels end-2022.
- Global contingent resources estimated at 1,200 billion boe end-2023.
- Argentina Vaca Muerta shale reserves 16 billion boe certified.
- US total proved reserves 44.4 billion barrels oil end-2022.
- Turkmenistan gas reserves 11.4 tcm end-2022.
- Kazakhstan oil reserves 30.0 billion barrels end-2022.
- Global oil reserves-to-production ratio 49.5 years end-2022.
- Indonesia oil reserves 2.5 billion barrels, declining rapidly.
- Mexico proved reserves 6.0 billion barrels end-2022.
- Oman reserves 5.4 billion barrels oil end-2022.
Reserves Interpretation
While the world theoretically has nearly 50 years of oil left at current consumption, that comfort is wildly misleading given the political concentration of reserves, the technical difficulty of accessing many of them, and the inconvenient fact that burning them all would likely cook the goose that laid the golden barrels.
Technology
- AI predictive maintenance reduced downtime 25% industry-wide 2023.
- Digital oilfields implemented in 60% of supermajor assets by 2023.
- Frac efficiency improved 30% with engineered completions 2023.
- CCUS projects captured 43 Mt CO2 from oil/gas in 2023.
- Autonomous rigs trialed on 50 US wells, 20% faster drilling.
- Fiber optic sensing used in 40% new horizontal wells 2023.
- Machine learning boosted seismic interpretation accuracy to 90%.
- Electrification reduced offshore emissions 15% on 20 platforms 2023.
- Nano-emulsions enhanced recovery by 10% in pilots 2023.
- Drone inspections covered 80% of pipeline networks 2023.
- Blockchain tracked 30% of LNG cargoes transparently 2023.
- 5G networks deployed on 15 offshore facilities for IoT.
- Robotic process automation automated 50% admin tasks.
- Hyperspectral imaging detected leaks with 95% accuracy.
- Geothermal hybrid with gas turbines 20% efficiency gain.
- Quantum computing simulated reservoirs 100x faster.
- AR/VR training reduced safety incidents 40%.
- Biodegradable fracs used in 10% shale ops 2023.
- Satellite methane monitoring cut emissions 25 Mtpa.
- Wireless downhole sensors real-time data 70% wells.
- 3D printing parts saved 30% logistics costs offshore.
- Predictive analytics averted 500 well failures 2023.
Technology Interpretation
The industry cleverly used tech to clean up its act, with AI predicting breakdowns, digital fields optimizing work, and even robots and satellites pitching in to drill faster, capture carbon, and stop leaks, all while keeping a sharp eye on both profits and the planet.
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