The Rise of Infrastructure-Led Exploration in the Oil and Gas Industry

As trade wars continue to create uncertainty among project developers in the offshore energy sector, global oil and gas operators are adapting their exploration strategies to prioritize low-risk, low-cost near-field or infrastructure-led exploration (ILX) prospects. This shift comes as budgets tighten and supply chain costs increase due to tariff woes.

Rystad Energy, a leading energy market intelligence group, has highlighted the industry’s focus on ILX as a way to navigate financial constraints, a challenging commodity price environment, and a dwindling pool of prospective basins. By capitalizing on existing production hubs and pipeline networks, ILX allows companies to commercialize smaller discoveries efficiently.

ILX Hotspots

According to Rystad Energy’s analysis, countries like Indonesia, the U.S., and Norway are expected to emerge as ILX hotspots in the coming year. Aatisha Mahajan, Vice President of Exploration Research at Rystad Energy, emphasized the importance of ILX in the current industry landscape, citing the need for cost-effective resource recovery amid market challenges.

Benefits of ILX

Unlike traditional greenfield projects that require significant capital investment, ILX offers lower development costs, shorter lead times, and reduced emissions. With nearly 900 ILX wildcat wells drilled in the past five years, Rystad Energy reports a 42% exploration success rate, surpassing the global average of 32%.

Looking ahead, Rystad Energy projects continued growth in ILX activity, with Southeast Asia, Western Europe, and North America leading the way. Countries like Indonesia, Malaysia, Vietnam, and Thailand are set to witness increased ILX drilling, showcasing the diverse opportunities in the region.

Future of ILX

As the oil and gas industry adapts to evolving market conditions, ILX remains a key driver of exploration efforts. With its proven success in maximizing infrastructure use and unlocking new reserves, ILX drilling is poised to play a crucial role in sustaining production levels and enhancing efficiency in the years to come.