Wood Mackenzie: five subsurface themes shaping upstream exploration and development in 2026

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. Next-generation geothermal technologies face a defining year as flagship projects must demonstrate commercial scalability.

"The upstream sector is recalibrating its approach to resource capture in 2026," said Andrew Latham, Senior Vice President, Energy Research at Wood Mackenzie. "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," Latham said. "The question is whether next-generation geothermal can prove it belongs in the same commercial league and meet 24/7 baseload power demand."

Wood Mackenzie identifies five key subsurface themes for 2026:

1. High-impact exploration focused on play-opening prospects despite spending pressures

Large and giant prospects will account for about one-third of exploration wells planned to spud in 2026. Petrobras plans three wells in Brazil's Foz do Amazonas Basin, including Mutum, and Petronas plans to drill the Block 48 prospect in Suriname, a potential play-opener in the ultra-deepwater Guyana Basin. ExxonMobil's first ultra-deepwater well offshore Trinidad and Tobago, TTUD-1, may test a deeper Cretaceous play on trend with Guyana. Success would be transformative for Trinidad and Tobago's declining production base. Play-opening wildcats are also planned for Jamaica and Peru. Timings may slip if operators delay spending.

Prediction: Overall exploration investment dips below US$20 billion as operators prioritise quality over quantity.

2. Strategic acreage access replaces competitive bidding

License partnerships will be driven by materiality, preferential host government deals, and returns rather than highest bids. Access rights will go to companies with the right combination of capital, track record, and relationships. Large national oil companies including Petronas and QatarEnergy are expanding acreage across Asia, West Africa, Brazil, and Guyana through partnerships with host-country NOCs such as Sonangol, SNPC, and Staatsolie. Government-to-government deals will open doors for cross-sector investments. KUFPEC's equity across Egypt, Malaysia, and Indonesia has delivered commercial discoveries in the Nile Delta and Malay basins. Azule Energy exemplifies the trend of Majors diversifying risk with new joint venture entities in key petroleum regions.

Prediction: Direct negotiation and government-to-government deals dominate acreage acquisition.

3. Major oil companies target NOC partnerships to redevelop giant fields

IOCs are pursuing discovered resources without exploration risk through giant field redevelopment contracts. Each deal accesses billions or tens of billions of barrels of in-place oil, where small recovery factor gains prove material. Since 2023, BP, ExxonMobil, TotalEnergies, and Shell announced projects including BP's Kirkuk contract in Iraq and Messla and Sarir MoU in Libya, ExxonMobil's Heads of Agreement to operate giant Iraqi fields including Majnoon, TotalEnergies' Ratawi project in Iraq, and Shell's Al-Atshan MoU in Libya. BP also signed a Technical Services Provider agreement with ONGC for Mumbai High offshore India. Host countries benefit from technology transfer and capital while Majors negotiate more attractive fiscal terms. MoUs between IOCs and NOCs to assess unconventional resources in Algeria, Bahrain, UAE, and Indonesia are poised to firm up capital commitments in 2026.

Prediction: Additional giant field redevelopment partnerships announced in Middle East and North Africa, with first firm commitments for global shale projects outside North America.

4. Ocean Bottom Node seismic and AI workflows compress exploration decision cycles

Next-generation OBN technology is decreasing survey costs while improving data quality. Multi-client campaigns are accelerating beyond the US Gulf of Mexico. Egypt will launch a seven-year, three-phase OBN campaign in the East Mediterranean executed by an SLB-Viridien consortium. Norway's Utsira North survey will provide enhanced resolution for near-field exploration and carbon storage identification. TGS and Viridien will deliver multiple products from US Gulf of Mexico surveys in 2026. AI is transforming workflows through faster processing and improved imaging of overlooked plays in mature basins. Majors are developing proprietary AI capabilities to reduce third-party reliance. When seismic-to-drilling timelines compress from months to weeks, competitive advantage shifts to companies that can orchestrate rig schedules, equipment procurement, regulatory approvals, and capital allocation at accelerated speeds.

Prediction: Multi-client OBN campaigns expand to three new regions outside North America, while AI-accelerated workflows create operational bottlenecks for unprepared operators.

5. Next-generation geothermal faces commercialisation test

Fervo Energy's Cape Station enhanced geothermal system project, backed by 500 MW of power purchase agreements, will come online in 2026. Eavor's Geretsried closed-loop facility in Germany started delivering power in December 2025. Success will unlock investor confidence and capital for smaller developers while failure could redirect investment toward oil and gas. Geo Energie Suisse will establish EGS operational benchmarks with seismicity-free drilling at Haute-Sourne. Mazama Energy will lead superhot rock testing in the US Pacific Northwest, targeting 15 MW by end-2026. Competition to drill deeper and hotter will drive cost reductions, attracting capital from technology companies seeking baseload power for data centres. High upfront drilling costs and reservoir uncertainty remain barriers. Shell's power purchase agreement with Fervo validates next-generation geothermal as bankable, while subsurface specialists such as SLB are leveraging oil and gas tools to reduce geological risks.

Prediction: Flagship enhanced and advanced geothermal projects demonstrate technical reliability but face continued scrutiny on economic viability at scale.

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Oilfield Technology’s November/December 2025 issue

The November/December 2025 issue of Oilfield Technology focuses on how the upstream sector is modernising to stay efficient, competitive, and lower-carbon. It explores decarbonising drilling operations, improving performance through advanced monitoring and drilling technologies, reshoring and strengthening supply chains, enhancing offshore inspections, and tightening cybersecurity. Together, the articles highlight a sector pushing towards greater efficiency, resilience, and sustainability across the full lifecycle of oilfield operations.

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