Amid mounting financial pressures, volatile commodity prices, and a dwindling pool of untapped basins, oil and gas companies worldwide are fundamentally changing their exploration strategies.
Operators are now prioritising low-risk, low-cost near-field or infrastructure-led exploration (ILX) prospects, leveraging existing production hubs and pipeline networks to commercialise smaller discoveries that might otherwise remain undeveloped.
ILX is not a new concept, but its appeal has intensified as the industry grapples with price volatility, sustainability demands, and strict capital discipline.
Rystad Energy forecasts exploration budgets will remain flat this year at around US$50 billion — a stark contrast to the US$117 billion spent annually at the industry’s 2013 peak.
According to Rystad Energy’s analysis, Indonesia, the US, and Norway are set to emerge as ILX hotspots in 2025.
“The global industry downturn, paired with emissions regulations, high costs and scarce frontier exploration prospects, has created an unfavourable environment for greenfield exploration,” said Aatisha Mahajan, Head of Exploration Research at Rystad Energy.
“The surge in ILX activity reflects a strategic push for cost-effective resource recovery, signalling a dynamic year ahead for near-field exploration.”
Unlike greenfield projects that require substantial capital for new infrastructure, ILX benefits from lower development costs, shorter lead times, and reduced emissions.
Over the past five years, nearly 900 ILX wildcat wells have been drilled globally, achieving a 42 per cent exploration success rate — well above the global average of 32 per cent. This approach not only sustains production but also maximises the use of existing infrastructure.
“With strong success rates and substantial resource additions, ILX drilling is vital for sustaining production and maximising infrastructure use,” Mahajan said.
“As the industry adapts, ILX remains a key driver of upstream exploration, enhancing efficiency and unlocking new reserves.”
Of the 100 ILX wells planned for 2025, Southeast Asia is set to see the highest activity, followed by Western Europe and North America.
In Southeast Asia, ILX drilling will span Indonesia, Malaysia, Vietnam, and Thailand across 15 distinct basins, underscoring the region’s diverse opportunities.
In Western Europe, Norway will be the sole focus, while the deepwater US Gulf of Mexico is expected to be a major ILX hotspot.
This strategic shift is expected to drive efficiency and resource recovery as the industry faces a future defined by tighter margins, environmental scrutiny, and a need for rapid returns.
As ILX continues to outperform traditional exploration in both success rates and cost-effectiveness, it is poised to remain at the forefront of upstream oil and gas activities in the coming years.
