The hunt for the next Guyana or Santos basin signals a reminder that an important engine of oil output is running out of new avenues of growth, but technological advancements provide good cause for optimism.
The top ten E&Ps account for around 70% of total deepwater production, with the Atlantic Margin the central region for deepwater growth. Brazil’s state-owned Petrobras and the US majors lead the way by value and dominate the investment outlook. But the hopper of pre-FID projects in both the Guyana and Santos basins is emptying out.
After the excitement around South America’s oil discoveries over the past decade, a new reality is starting to emerge: one of pragmatism and a widening of the search for other incremental deepwater projects. This has included a buzz around Africa such as the Shell-operated Bonga SW/Aparo and Italian IOC Eni’s Baleine Phase 3 in Cote d’Ivoire and a new buzz around Namibia.
However, this assumption is the mother of all mistakes, and consultancy Welligence Analytics models only one pre-FID project in Namibia for the top ten players. Welligence points out that, with the investment hurdle rates of 15% IRR and breakevens of $30-40/bl when considering the sanction of new projects with standalone facilities, the majority of the standalone projects are struggling to deliver the required returns.
From strength to strength
But the expertise and strengths of the biggest operators continues to deepen. Petrobras has by far the largest and most valuable deepwater portfolio and accounts for close to a third of global deepwater production. With Chevron’s acquisition of US-headquartered Hess complete, the US major is now the top IOC by deepwater value, followed closely by ExxonMobil. European operators Shell and TotalEnergies follow closely behind, while peer Eni has the highest portfolio weighting to deepwater gas, albeit it also has one of the smaller portfolios by value.
Petrobras’ experience highlights how technology is changing the game and opening up new possibilities. The Brazilian energy producer has been adopting improved drilling techniques for its pre-salt drilling, such as advanced drillbits, and high performance casing and cementing systems. At Tupi, this has driven drill days (from start to completion) from an average of 110 over 2011–13 to around 55 today.
Others have also been working with contractors on new technologies to improve drill times. For example, services company SLB’s combined AccuStrike bit with PowerDrive Orbit G2 was successfully deployed by ExxonMobil in Guyana. Using machine learning AI, SLB (Eletris) and fellow services provider Baker Hughes (MultiNode/SureCONTROL) have been pushing intelligent completions to help E&Ps reduce maintenance costs, cut downtime and improve overall efficiency. Meanwhile, contractors such as TechnipFMC are also pushing new technologies on the subsea front.
There is also hope that, with new models such as standardised hulls and iEPCI subsea gaining traction, costs and cycle times will come down. Contractors have been pushing the integrated EPCI (iEPCI) solution as a step change in cutting cycle time and costs. Industry traction was initially slow, with the model used mainly for small tieback projects. But now operators are using the integrated SPS/SURF package model at world-class standalone projects such as Bacalhau (Norway’s Equinor, Brazil), Kaskida (BP, US Gulf of Mexico) and Gato do Mato (Shell, Brazil). ExxonMobil was an early adopter of SBM’s standardised hulls. This is one of the factors that has contributed to its top-class lead times in Guyana.
Deepwater is also improving its emissions, with E&Ps leveraging new technology to improve their carbon footprint. The Azule-operated Agogo FPSO is the first to rely on post-combustion carbon-capture technology. The vessel was brought onstream in July 2025 and the technology is expected to reduce emissions by approximately 27%. Equinor’s Bacalhau and Raia Manta FPSOs will use combined cycle gas turbines that are expected to reduce emissions by 25%. Meanwhile The US Gulf of Mexico still holds top spot globally as the deepwater region with the lowest emissions intensities.
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