New Frontier Exploration Offshore Latin America will not attract funding in a post-COVID19 world

In the recent past, E&P operators have been able to enter into high prospect regions safe in the knowledge that over a 20-30 year window, there would be a supply-demand gap for them to fill. However, with the COVID-19 pandemic throwing doubt on global demand over the next 5+ years and the oil price war sending commodity prices spiralling, will O&G companies and investors alike be prepared to take on new exploration risk in one of the world’s highest potential regions?

• Is exploration activity feasible at $40 oil? What oil price do producers base development plans on?
• Why take on exploration risk in a low price environment when you can invest into PDP assets and buy existing cash flow?
• What assumptions are explorers and producers basing development on in terms of export markets? Will future demand justify bringing new supply online?
• How can offshore projects outside of high demand regions like the Gulf of Mexico compete with onshore shale and conventional onshore projects? What markets will that supply go to?
• What are the economic assumptions to get deepwater E&P projects over the line?
• Can Latin America truly be a high impact exploration region? What are the geographic considerations to take into account vis-à-vis the likes of Mozambique?