Frontier oil and gas exploration today usually means expensive, difficult and risky drilling offshore, often in untested deep waters. And most deepwater frontier wildcats result in dry holes. Is frontier exploration still worth it? Still relevant?
“Thanks to advances in drilling and imaging, offshore and deepwater exploration has become a significant contributor to major discoveries,” said Anna Lougon, Americas business development director, Earth data, for geoscience, advanced technology and data company Viridien.
“The future of offshore and deepwater exploration looks promising, driven by innovations that are making these ventures more economically viable and environmentally sustainable,” Lougon said.
The Offshore Technology Conference session, “Unlocking Frontier Areas for Energy Transition,” will look at frontier exploration in an afternoon presentation on Tuesday, May 6. AAPG is a sponsor for the session.
Lougon will serve as moderator, along with Huyen Bui, senior geophysicist for Shell Oil. Bui and Fernando Mendes, general manager-Petrobras, are session chairs.
“With the increasing interest in untapped regions in Latin America and Africa, we anticipate significant growth in deepwater exploration for these regions. These efforts are not only about finding new reserves but also about proving the viability of remote and complex reservoirs in a responsible manner,” Lougon noted.
Jessica Ciosek, principal analyst for energy data and analytics company Wood Mackenzie, is one of the scheduled speakers on the OTC session panel.
“Demand for energy continues to grow and supply has not been keeping up – continued investment in oil and gas will be needed to meet society’s needs. Discovery sizes in mature basins continue to decrease, while frontier basins still deliver high-impact volumes when there is success,” Ciosek said.
“To offset the natural decline in maturing basins and to mitigate the risks to energy security from potential above-ground disruptions, resource diversification is key. And frontier exploration is a part of that,” she observed.
Fueling the Transition
At this point in time, investment in alternative energy sources and the pace of their development “is not enough to bridge the gap,” Ciosek said.
The OTC session, in its program description, promises to “provide valuable perspectives on overcoming the challenges and harnessing the potential of these frontier areas in the energy transition journey.”
Industry analysts see two main ways that frontier exploration could support a transition to low-carbon energy.
First, significant discoveries can provide an alternative to relatively high-emission sources.
“There are huge volumes of discovered resource scattered around the world that are yet to be developed. These are either high cost or carbon intensive, or both. Successful high-impact exploration has the potential to deliver the lower-cost, low-carbon-intensive barrels that can help fill the future supply gap,” Wood Mackenzie noted in a recent blog post.
Second, new frontier discoveries provide more time to scale up alternative energy sources, without energy shortages, excessive increases in energy costs or additional, carbon-intensive energy development.
“Frontier exploration is crucial for the energy transition as it supports the global energy supply while renewable technologies advance and scale up. In regions like Brazil and other frontier areas, the potential for significant hydrocarbon finds can provide the necessary energy stability and economic growth during this transitional period,” Lougon said.
She predicts future exploration will become more selective, focusing on low-cost, low-risk, low-emission and short-cycle hydrocarbons.
“This focus will require technological innovations in subsurface imaging and drilling as well as a deeper understanding of the petroleum systems, particularly in regions with untapped potential, and will lead to more efficient and environmentally responsible extraction methods,” she said.
Why Frontier Exploration?
Frontier exploration offshore has benefitted from recently improved capabilities, such as working in very high-pressure, high-temperature environments and drilling in ultra-deepwater settings. Also, seismic advances have led to improved analysis of frontier prospects.
“In frontier areas, seismic and geophysical technologies are more crucial than ever as they provide better subsurface images and greater insight into prospective reservoirs. They allow us to address complex geological structures safely and effectively,” Lougon said.
“By enhancing our subsurface understanding, these technologies reduce exploration risks and increase the likelihood of discovery. These technologies are especially vital for identifying viable hydrocarbon reservoirs in challenging environments, where conventional exploration methods might fall short,” she added.
But the fact remains, most frontier wells do not discover oil or gas in commercial accumulations. The great majority turn up dry. Results will be released in 2025 for several high-profile, frontier wells spud between the fourth quarter of 2024 and the end of this year. As of mid-March, at least five of those wells were already reported to be or believed to be dry holes.
Westwood Global Energy Group projected that 21 high-impact frontier wells will be drilled this year, 11 of them targeting frontier basins. S&P Global noted that more than 35 high-impact wells were scheduled globally for 2025, with drilling in both frontier basins and mature provinces.
Wood Mackenzie identified 30 significant conventional wells to watch in 2025. It noted that, overall, more than 100 large-to-giant prospects are expected to be drilled this year, with over 85 percent of those wells in deep waters.
Despite a lack of reported success early in 2025, industry reaction has mostly been upbeat. Korea National Oil Corp. confirmed in February that its initial Blue Whale exploration test came in dry. It was South Korea’s first attempt to identify offshore hydrocarbon reserves in the East Sea east of Pohang.
A KNOC official reportedly said, “Preliminary assessments indicate that conditions such as cap rock, reservoirs and porosity are better than initially predicted, which raises hopes for future exploration.”
Another closely watched wildcat, a well operated by Vår Energi on the Kokopelli prospect in North Sea production license 1090, was confirmed as a dry hole in March. This comes as the industry tries to bounce back from a disappointing year in discovered resources.
“We wouldn’t call them wildcats if their chances of success were high!” Ciosek observed.
“Frontier exploration is high risk and tests new ideas. Though it’s unlikely that the first wells will deliver big discoveries, they do provide information that improves our understanding of the basin and where the next wells should be drilled to increase their chances of success,” she said.
Also, frontier-area exploration programs can “provide momentum for the development of energy policy and creation of fiscal terms in new regions so that when there is success, a framework is in place for operators to move forward,” she noted.
Lessons from Failure
Scheduled frontier exploration extends into 2026, although the energy industry appears headed for another period of layoffs and cutbacks. High costs, intermittent success and lower oil prices make the outlook for frontier wildcats questionable.
That doesn’t negate the need for exploration drilling, according to Lougon. She said dry holes provide critical data that refine geological models and exploration strategies, and they also play an important part in testing out new petroleum plays.
“In frontier exploration, every drilling outcome teaches us more about the Earth’s subsurface, helping to optimize future explorations and minimize environmental impact. While not the desired outcome, dry holes are a valuable learning tool that contributes to more successful and sustainable operations in the long run,” she said.