Oil & Energy
10 Most Incredible Oil, Gas Discoveries Of All Time
To date, Azerbaijan has oil reserves estimated at some 7 billion barrels and produces over 800,000 bpd. Most of this is exported as the country’s domestic consumption and is relatively minor due to its size.
The start of American oil
In 1859, a man named Edwin Drake drilled the first-ever oil well in America. According to historical sources, it was also the first well that was actually drilled instead of dug out, as oil seeping up into the soil had been extracted until then.
The Oil Creek at Titusville, Pennsylvania, marked the official beginning of the American oil industry. The first well was less than 70 feet deep, and it triggered a gold rush that would eventually turn the U.S. into the world’s largest producer of oil.
Oil Springs
The first results of the new gold rush — the rush for black gold — came just a few years after Drake’s Pennsylvania discovery. Four months after the discovery, another adventurous gentleman, Lyne Taliaferro Barret, began looking for oil in the eastern part of Texas in an area called Oil Springs.
As sometimes happens, the timing was not the best. Barret had not yet discovered oil when work on the well had to be stopped for reasons such as the Civil War and Texas’ secession from the Union. It resumed after the end of the Civil War, and Barret struck oil in 1866. This was the first oil well in Texas.
The gusher era
If there’s one discovery that’s arguably more famous than those first two oil wells in America, that would be Spindletop: the first gusher. No more apt name has been created for one of the world’s biggest oil discoveries.
A geyser of crude oil erupted from Spindletop Hill in Texas on January 10, 1901, and the well ended up producing an amazing 100,000 barrels daily—a rate not exactly common in those days. If the Oil Springs discovery marked the start of oil in Texas, then Spindletop gave it the push that eventually made it the industry it is today.
Oil in the Middle East
The first oil well in the Middle East was not, as one might expect, discovered in Saudi Arabia. That came later. Oil was first discovered in Persia, today’s Iran, thanks to a Brit, William Knox D’Arcy, who’d got a 60-year concession from the Iranian government.
D’Arcy funded the operation, which started in 1903, while the drilling was done by George Bernard Reynolds—an already prominent petroleum engineer. The Masjed Soleiman field was discovered in 1908, and it reached peak production in 1928.
Amazingly, the field still produces to this day, but 2023 is expected to be its last year. The discovery led to the creation of what we now know as BP, one of the biggest oil companies in the world. Related: Analysts See Oil Prices Rising To $90 By End-2023
#6 The rise of the desert kingdom
Three decades after the discovery of the Masjed Soleiman field, American engineers from Standard Oil struck oil in the desert peninsula known as Saudi Arabia. It was 1938, and nobody knew that a new star was being born.
The Dhahran discovery turned out to be the biggest in history up to that point, and it changed everything—not just for Saudi Arabia but for the world. From a largely nomadic people unconcerned about world affairs, the country turned into the world’s biggest oil producer and kept that crown for decades.
At the same time, the Dhahran discovery marked one more step on the Middle East’s way to becoming the world’s major oil supplier. It was followed by discoveries of oil in Iraq, Kuwait, and the UAE, some of which remain the biggest reservoirs in history to this day.
#7 The South American oil jewel
The Bolivar Coastal field was discovered in 1917 by Shell and still remains one of the largest in the world. By 1958, the field was producing more than 1.4 million barrels daily, and its reserves were estimated at 11.1 billion barrels.
The field was the first dip into the Maracaibo Basin—a huge oil reservoir largely located under Venezuela’s Lake Maracaibo. The reservoir under the lake contains a substantial part of Venezuela’s total oil reserves, which are the largest in the world.
The last big ones
Most of the massive oil field discoveries in the world were made before the late 1980s. Since then, discoveries of huge fields have been negligible in terms of numbers. In fact, the only really big oil discovery in the last 30 years was the Kashagan field in the Kazakh section of the Caspian Sea.
The field has a maximum production capacity of 380,000 bpd, which was hit in 2019. Its development has not been free from trouble, cost overruns, and delays, but it continues to contribute a substantial part of Kazakhstan’s oil output.
Guyana and the future
Guyana’s rise to prominence as a new oil hotspot harkens back to the days of the big oil discoveries. Exxon and Hess have tapped an estimated 11 billion barrels in oil reserves in the Stabroeck block, and they still keep striking oil there.
Guyana’s current production stands at 360,000 bpd, which is double what it was less than two years ago. For 2030, production is seen topping 1.6 million barrels daily.
Oil Discoveries FAQ
The largest oil discovery to date is the Ghawar Field, located in eastern Saudi Arabia. It is estimated to hold up to 75 billion barrels of oil reserves and has been in production since 1951. However it’s worth, note that new discoveries and technological advancements could potentially surpass this in the future.
What was the first major oil discovery?
The world’s first major oil discovery was made in Pennsylvania, United States, in 1859. This discovery, known as the Drake Well, produced about 25 barrels a day and introduced the world to the potential of oil as an energy source. It sparked the first oil boom in the United States and was a precursor to the global oil industry.
Who first discovered oil in the world?
The first discovery of oil in the world is difficult to attribute to a single person or culture, as oil has been known and used for various purposes for thousands of years.
The ancient Sumerians, for instance, used asphalt to waterproof their boats, and oil seepages were used for medicinal purposes in ancient Egypt and China. However, the modern oil industry is considered to have originated in the mid-19th century, with the first commercial oil well being drilled by Edwin Drake in Pennsylvania, United States, in 1859.
What is the deepest oil that has been found?
The deepest oil well in the world is the Z-44 Chayvo Well, located on Sakhalin Island in Russia. It was drilled by Exxon Neftegas Limited in 2005 and has a depth of 12.376 kilometers (7.716 miles). It is known as an “extended reach” or “horizontal” well because it extends out more than 11 kilometers (6.8 miles) horizontally beneath the sea floor. The oil is located within the Sakhalin-1 project area in the Sea of Okhotsk, near the coast of Siberia.
By: Irina Slav
Slav reports for Oilprice.com
The Federal Government has expressed optimism in attracting more investments by International Oil Companies (IOCs) into Nigeria to foster growth and sustainability in the energy sector.
This is as some IOCs, particularly Shell and TotalEnergies, had announced plans to divest some of their assets from the country.
Recall that Shell in January, 2024 had said it would sell the Shell Petroleum Development Company of Nigeria Limited (SPDC) to Renaissance.
According to the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, increasing investments by IOCs as well as boosting crude production to enhancing Nigeria’s position as a leading player in the global energy market, are the key objectives of the Government.
Lokpobiri emphasized the Ministry’s willingness to collaborate with State Governments, particularly Bayelsa State, in advancing energy sector transformation efforts.
The Minister, who stressed the importance of cooperation in achieving shared goals said, “we are open to partnerships with Bayelsa State Government for mutual progress”.
In response to Governor Douye Diri’s appeal for Ministry intervention in restoring the Atala Oil Field belonging to Bayelsa State, the Minister assured prompt attention to the matter.
He said, “We will look into the issue promptly and ensure fairness and equity in addressing state concerns”.
Lokpobiri explained that the Bayelsa State Governor, Douyi Diri’s visit reaffirmed the commitment of both the Federal and State Government’s readiness to work together towards a sustainable, inclusive, and prosperous energy future for Nigeria.
While speaking, Governor Diri commended the Minister for his remarkable performance in revitalisng the nation’s energy sector.
The Federal Government has assured investors in the nation’s gas sector of the security and safety of their investments.
Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, gave the assurance while hosting top officials of Shanghai Huayi Energy Chemical Company Group of China (HUAYI) and China Road and Bridge Corporation, who are strategic investors in Brass Methanol and Gas Hub Project in Bayelsa State.
The Minister in a statement stressed that Nigeria was open for investments and investors, insisting that present and prospective foreign investors have no need to entertain fear on the safety of their investment.
Describing the Brass project as one critical project of the President Bola Tinubu-led administration, Ekpo said.
“The Federal Government is committed to developing Nigeria’s gas reserves through projects such as the Brass Methanol project, which presents an opportunity for the diversification of Nigeria’s economy.
“It is for this and other reasons that the project has been accorded the significant concessions (or support) that it enjoys from the government.
“Let me, therefore, assure you of the strong commitment of our government to the security and safety of yours and other investments as we have continually done for similar Chinese investments in Nigeria through the years”, he added.
Ekpo further tasked investors and contractors working on the project to double their efforts, saying, “I want to see this project running for the good of Nigeria and its investors”.
Earlier in his speech, Leader of the Chinese delegation, Mr Zheng Bi Jun, said the visit to the country was to carry out feasibility studies for investments in methanol projects.
On his part, the Managing Director of Brass Fertiliser and Petrochemical Ltd, Mr Ben Okoye, expressed optimism in partnering with genuine investors on the project.
Crude oil prices recently logged their second monthly gain in a row as OPEC+ extended their supply curb deal until the end of Q2 2024.
The gains have been considerable, with WTI adding about $7 per barrel over the month of February.
Yet a lot of analysts remain bearish about the commodity’s prospects. In fact, they believe that there is enough oil supply globally to keep Brent around $81 this year and WTI at some $76.50, according to a Reuters poll.
Yet, like last year in U.S. shale showed, there is always the possibility of a major surprise.
According to the respondents in that poll, what’s keeping prices tame is, first, the fact that the Red Sea crisis has not yet affected oil shipments in the region, thanks to alternative routes.
The second reason cited by the analysts is OPEC+ spare capacity, which has increased, thanks to the cuts.
“Spare capacity has reached a multi-year high, which will keep overall market sentiment under pressure over the coming months”, senior analyst, Florian Grunberger, told Reuters.
The perception of ample spare capacity is definitely one factor keeping traders and analysts bearish as they assume this capacity would be put into operation as soon as the market needs it. This may well be an incorrect assumption.
Saudi Arabia and OPEC have given multiple signs that they would only release more production if prices are to their liking, and if cuts are getting extended, then current prices are not to OPEC’s liking yet.
There is more, too. The Saudis, which are cutting the most and have the greatest spare capacity at around 3 million barrels daily right now, are acutely aware that the moment they release additional supply, prices will plunge.
Therefore, the chance of Saudi cuts being reversed anytime soon is pretty slim.
Then there is the U.S. oil production factor. Last year, analysts expected modest output additions from the shale patch because the rig count remained consistently lower than what it was during the strongest shale boom years.
That assumption proved wrong as drillers made substantial gains in well productivity that pushed total production to yet another record.
Perhaps a bit oddly, analysts are once again making a bold assumption for this year: that the productivity gains will continue at the same rate this year as well.
The Energy Information Administration disagrees. In its latest Short-Term Energy Outlook, the authority estimated that U.S. oil output had reached a record high of 13.3 million barrels daily that in January fell to 12.6 million bpd due to harsh winter weather.
For the rest of the year, however, the EIA has forecast a production level remaining around the December record, which will only be broken in February 2025.
Oil demand, meanwhile, will be growing. Wood Mackenzie recently predicted 2024 demand growth at 1.9 million barrels daily.
OPEC sees this year’s demand growth at 2.25 million barrels daily. The IEA is, as usual, the most modest in its expectations, seeing 2024 demand for oil grow by 1.2 million bpd.
With OPEC+ keeping a lid on production and U.S. production remaining largely flat on 2023, if the EIA is correct, a tightening of the supply situation is only a matter of time. Indeed, some are predicting that already.
Natural resource-focused investors Goehring and Rozencwajg recently released their latest market outlook, in which they warned that the oil market may already be in a structural deficit, to manifest later this year.
They also noted a change in the methodology that the EIA uses to estimate oil production, which may well have led to a serious overestimation of production growth.
The discrepancy between actual and reported production, Goehring and Rozencwajg said, could be so significant that the EIA may be estimating growth where there’s a production decline.
So, on the one hand, some pretty important assumptions are being made about demand, namely, that it will grow more slowly this year than it did last year.
This assumption is based on another one, by the way, and this is the assumption that EV sales will rise as strongly as they did last year, when they failed to make a dent in oil demand growth, and kill some oil demand.
On the other hand, there is the assumption that U.S. drillers will keep drilling like they did last year. What would motivate such a development is unclear, besides the expectation that Europe will take in even more U.S. crude this year than it already is.
This is a much safer assumption than the one about demand, by the way. And yet, there are indications from the U.S. oil industry that there will be no pumping at will this year. There will be more production discipline.
Predicting oil prices accurately, even over the shortest of periods, is as safe as flipping a coin. With the number of variables at play at any moment, accurate predictions are usually little more than a fluke, especially when perceptions play such an outsized role in price movements.
One thing is for sure, though. There may be surprises this year in oil.
lrina Slav
Slav writes for Oilprice.com.
