The Great Re-Risking: Why Frontier Exploration is Back on the Boardroom Agenda
For the past several years, the narrative dominating the oil and gas industry has been one of managed decline and green diversification. Boardrooms have been (publicly, at least) more focused on megawatts than barrels.
But reality has a formidable way of asserting itself.
Amidst the rhetorical pivot to renewables, a fundamental crisis has been brewing: we stopped finding enough oil and gas. In 2023, global discovered conventional volumes hit their lowest point in over a decade, barely topping 5 billion barrels of oil equivalent (boe). At the same time, the majors' collective reserve replacement ratio (RRR)—the single most important metric for a resource company's longevity—is struggling to stay above 100%.
You cannot survive as an oil company if you don't find oil.
Combine this with resurgent global demand and the stark lessons in energy security delivered by recent geopolitical turmoil, and the result is inevitable. The supermajors are quietly, but decisively, re-entering the high-stakes game of frontier exploration. This isn't a speculative gamble; it's a calculated, strategic necessity to secure the next wave of production and, frankly, to ensure their survival.
The Majors’ Calculated Return to the Frontiers
The peer group of six supermajors still holds the keys to the kingdom. They are responsible for roughly 20% of all conventional volumes discovered since 2020, possessing the deep pockets and technological prowess to tackle the challenging geology of frontier basins.
However, their strategies are not uniform. We are seeing a clear divergence in appetite.
The Re-Engaged Frontiersmen (Exxon, BP, Chevron):
ExxonMobil, buoyed by its astonishing success in Guyana (over 13 billion barrels discovered since 2015), is keen to replicate that model. It is aggressively acquiring acreage in places like Trinidad & Tobago and even dipping its toes back into Libya, leveraging its deepwater expertise.
BP has performed the most public pivot, openly walking back its most aggressive low-carbon targets to reinvest in its core business. A planned exploration spend of $1.2 billion per year and a programme of around 40 wells is a clear statement. Its new ventures in Brazil, Libya, and the Caspian Sea are classic, high-impact frontier plays.
Chevron has awoken from an exploration slumber. After years of relative inactivity, it is now acquiring high-risk, high-reward acreage in Brazil's Foz do Amazonas Basin, ultra-deepwater Angola, and emerging basins in Namibia.
The Balanced Portfolio Players (Total, Eni):
TotalEnergies is playing a clever game. It has trimmed its headline exploration budget to around $835 million but is using that capital surgically, acquiring frontier stakes in the US Gulf of Mexico and Suriname. Its focus is on "low-cost, low-emission" barrels—the new industry mantra.
Eni is perhaps the most transparent with its "dual exploration" strategy. It explicitly balances high-risk frontier exploration with a steady diet of near-field projects that can be monetised quickly, funding the long-game with the short.
The Cautious Holdout (Shell):
Shell remains the outlier. Its "value over volume" strategy prioritises sweating existing assets and near-field exploration. It is, for now, shunning the frontier. This is a lower-risk, cash-generative approach, but the question remains: for how long can you manage decline before you decline managing?
The New Rules: Profitability in a High-Risk, High-Scrutiny Era
This isn't a return to the "drill, baby, drill" days of 2010. The investor landscape has changed. Shareholders demand capital discipline. Simply finding a multi-billion-barrel field is not enough; it must be profitable, and it must be developed efficiently.
The old model of decade-long, budget-busting mega projects is dead. To win in this new era, operators must adopt a new playbook.
Prioritise Cycle Time Over Size: The game has shifted from "how big is it?" to "how fast can we get it to first oil?" A recent Wood Mackenzie report noted the average time from discovery to production has crept up to nearly 7 years. This destroys value. The focus must be on slashing this cycle time.
Embrace Digital De-Risking: The exploration success rate for frontier wells still hovers at a costly 30-35%. Leveraging AI and advanced data analytics to high-grade prospects before a single bit touches the seabed is no longer optional. It is the only way to make a $1.2 billion exploration budget survivable.
Standardise and Modularise: Stop engineering every project as a bespoke, gold-plated masterpiece. Adopting modular, repeatable subsea and topside designs is the most effective way to crush CAPEX and accelerate project schedules.
Adopt Agile Partnerships: The supermajors are financial and geological powerhouses, but they are not inherently agile. They are supertankers. They cannot afford the internal bureaucracy and colossal overheads of the past when moving into new, unproven basins.
The Agility Imperative: Where Oilfield International Services Fits
This final point is where the entire model for frontier success hinges. The majors must learn to integrate their financial muscle with the speed and leanness of specialist partners. This is precisely the gap that Oilfield International Services (OIS) is built to fill.
A supermajor is simply not structured to be nimble. Whilst it is busy aligning global departments for a single project, a frontier opportunity can be lost or its economics eroded by delay.
OIS provides the critical agility that the new exploration model demands:
Speed to Market: We provide highly experienced professionals to provide in-house Fluids, Cement and Drilling Waste Management engineering project management services. We can be mobilised to de-risk a prospect or manage early-phase engineering, directly addressing the cycle-time imperative.
Variable Cost Base: OIS allows an operator to access world-class technical expertise without carrying the enormous, fixed overheads. Our clients use us when they need us, scaling up for a drilling campaign in Africa and scaling down when drilling activities are completed. This aligns costs directly with the capital programme.
Integrated Project Focus: Our entire business is structured to assist in the managing of integrated projects efficiently. Our focus is full integration with the well engineering team to ensure that the deliverables happen.
The return to frontier exploration is essential for our energy security and for the long-term health of the industry.
But the winners will not be those who spend the most; they will be those who explore the smartest. Success will be defined by discipline, speed, and the intelligent integration of agile partners like OIS to execute on these new, high-stakes ventures.
Contact us now to get a quote.