After several years of historically low investment and drilling, the global oil and gas upstream sector is showing signs of renewed exploration activity.
However, projected low oil prices will put pressure on the sector, as companies increasingly focus on selective high-impact drilling rather than broad exploration programs.
A new report by Enverus Intelligence Research (EIR) found that while global exploration and appraisal in 2025 remained near historical lows, long-term indicators such as block awards, new country entries, and increased seismic surveying pointed to a gradual recovery forming from a very low base.
Moreover, despite the depressed activity levels, exploration success rates have steadied in the 30 to 40 per cent range, underscoring a continued focus on prospect upgrading, capital discipline, and risk-weighted exploration strategies.
Patrick Rutty, Director at EIR, said exploration was not rebounding quickly, but the early indicators were clearly improving.
He said: “Given recent drilling success and diminished concerns over peak demand, the industry is reprioritising exploration.
“[This] dynamic should drive resource capture to relatively high levels over the next five years, but does not yet negate the risk of a structural supply gap later this decade.”
More than 50 per cent of total activity in 2025 comprised offshore exploration, driven by infrastructure-led exploration and a renewed focus on higher-impact opportunities.
EIR found supermajors and national oil companies were leading the exploration recovery, particularly in acquiring new acreage in regions where subsurface potential for giant discoveries was matched by aboveground conditions that supported faster project advancement.
It said that independent and junior explorers were increasing participation, signalling broader industry re-engagement beyond supermajors and national oil companies.
EIR added that it expected the slow recovery to contribute to a structural supply gap after 2030, as limited exploration today constrained future project pipelines and resource replacement.
This was expounded upon by Wood Mackenzie, which stated that global upstream exploration spending would “dip below the US$20 billion annual average of the last five years as low oil prices pressure the sector”.
Wood Mackenzie said: “Appetites for strategic growth remain strong, but companies are focusing on selective high-impact drilling rather than broad-based spending.
“Major oil companies are pursuing giant field redevelopment partnerships with national oil companies to secure discovered resources without exploration risk.
“The exploration landscape is shifting from traditional licensing rounds toward government-to-government deals and direct negotiation.
“Ocean bottom node seismic technology and artificial intelligence are compressing decision timelines from months to weeks.”
Andrew Latham, Senior Vice President, Energy Research at Wood Mackenzie, said the upstream sector was recalibrating its approach to resource capture in 2026.
Latham said: “Exploration spending remains disciplined, but the industry is pursuing multiple pathways to growth, from play-opening wildcats in the Atlantic margin to unlocking billions of barrels from producing fields through IOC-NOC partnerships. “Technology is accelerating both discovery and development of conventional hydrocarbons.”
STRATEGIC HIGH-IMPACT EXPLORATION THE FOCUS
According to Rystad Energy, the global upstream sector entered 2026 with surging exploration activity, after a year when success rates of high-impact wildcat drilling climbed to 38 per cent from 23 per cent in 2024.
This resulted in a 53 per cent year-on-year increase in discovered volumes, reaching approximately 2.3 billion barrels of oil equivalent.
Rystad has identified 42 high-impact wells globally, which are classified based on their potential resource size, their ability to open new hydrocarbon plays in frontier or emerging basins, and their strategic importance to operators.
Of these, Africa maintains its leadership, accounting for about 40 per cent of the total.
Rystad said drilling activity across the continent would continue to surge along the Atlantic margin, with the Orange basin in southern Africa and the Gulf of Guinea in West Africa emerging as key exploration hubs.
Rystad’s outlook for 2026 projected that ultra-deepwater and frontier exploration would dominate the year’s activity, with about 60 per cent of planned high-impact wells in ultra-deepwater zones, primarily led by major operators, and national and international state-owned companies comprising about 26 per cent of the total.
Most wells aim to test frontier regions, with approximately 5 per cent targeting previously discovered basins that could evolve into future hotspots, and another 5 per cent venturing into completely untested plays.
Africa’s role remains vital, as it is the site of all onshore high-impact drilling planned for 2026, except for a single frontier test in Jameson Land, Greenland.
Aatisha Mahajan, Head of Exploration, Oil & Gas Research at Rystad, noted that exploration investment patterns were evolving.
She said 2026 marked a distinct shift in where companies were willing to commit capital, with ultra-deepwater and frontier developments continuing to attract significant spending despite their higher costs.
These projects offered scale and meaningful upside at a time when opportunities in conventional regions were narrowing.
Mahajan emphasised that Africa still provided the geological promise and commercial potential needed for substantial discoveries, particularly as operators sought long-lived resource bases amid tightening global supply conditions.
Beyond Africa, Asia represented the next most active wildcat drilling region with eight high-impact wells identified – four in Indonesia, and two each in India and Malaysia.
Between 2021 and 2025, these countries awarded the largest offshore acreage in the region, each exceeding 200,000 square kilometres. Meanwhile, Kazakhstan, Pakistan, and China
dominated onshore licensing, highlighting Asia’s diverse exploration strategies.
In contrast, North America’s exploration outlook has softened considerably since 2022, with the region’s yearly discovered volumes failing to match even the previous decade’s lows.
Discoveries across Canada and Mexico have also slowed, leaving the US Gulf of Mexico as the main contributor.
In 2025, total new finds reached approximately 238 million barrels, including 68 million barrels from Mexico and 170 million barrels from the Gulf.
With exploration now largely confined to mature basins, the region’s future appears tilted toward incremental, oil-weighted additions rather than breakthrough discoveries.
