With the increase in deepwater exploration drilling in 2019 and the largest discoveries of last year also mostly located in deepwater settings, it is likely that deepwater acreage offered by governments will continue to attract significant company interest through 2020.

deepwater 2020

Figure: Q1 2020 closing bid rounds: Blocks on offer by terrain. Credit: GlobalData.

In Q1 2020, 16 licensing rounds are open with seven scheduled to close in the quarter. Africa is hosting the largest number of licensing rounds with four countries hosting one round each. Three countries in Asia are also hosting one round each.

Of the seven bid rounds scheduled to close, lease sale 254, hosted by the US, offers the largest volume of deepwater acreage and will be held in March 2020. The round follows lease sale 253, held in August 2019, which yielded $159 million in high bids.

In total, 27 companies participated in the round, including Equinor, which submitted 23 high bids, and BP, which submitted 21 high bids. The previous sale, lease sale 252, yielded more than $244 million in high bids with 30 companies participating.

Additionally, Senegal officially launched its 2020 licensing round in the quarter. The round offers 12 offshore blocks and is expected to generate significant interest following the recent exploration successes in the area.

Looking ahead into 2020 and beyond, Africa, Asia and South America are expected to see the most licensing activity.