The oil and gas sector was smacked around by the COVID-19 pandemic earlier this year with the shutdown of international flights an travel restrictions slashing demand and at one point sending oil prices down into negative territory.

However, things appear to be looking up.

There is growing confidence that the worse is over with several different vaccines for the pandemic now either approved for use or in the final stages of testing.

Oil prices have spent most of December above the $US45 ($60) per barrel level while energy consultancy Wood Mackenzie has flagged that at least $US11bn of gas projects are poised for a final investment decision in 2021.

“After doing everything possible to tighten belts this year, Australian operators will open their wallets and start spending,” Woodmac senior analyst Daniel Toleman said.

“The backlog of FIDs will begin to clear as a fresh round of projects are sanctioned. But for this to occur, there has to be continuing improvement in the macro-environment and prices trending up.”

Besides a number of onshore Perth Basin projects, Santos’ (ASX:STO) Barossa project and Woodside Petroleum’s (ASX:WPL) Scarborough project are also expected to be approved.

Exploration and development activity is also expected to increase on the east coast and overseas.

New investment is sorely needed as the US Energy Information Administration flagged in its 2020 World Energy Outlook. Even in its net zero 2050 scenario, the decline in both oil and gas demand will still be lower than the decline in supply without investment in new resources.

Here’s a breakdown of some of the oil and gas activity that we can expect in 2021 by basin.

Bedout sub-basin Basin

We begin our tour with some offshore activity with Carnarvon Petroleum (ASX:CVN) noting that operator Santos has flagged the drilling of the Pavo and Apus prospects in late 2021.

The material prospects can be easily tied back to Dorado in the event of success, which maximises the value of the development at FID in the first half of 2022.

In 2019, the Dorado-3 well flowed more than 11,000 barrels of oil per day along with 21 million standard cubic feet, one of the highest oil flow rates from an appraisal well in the North West Shelf off Western Australia.

Cooper Basin

While attention has been focused on other onshore basins in recent times, the Cooper Basin in South Australia remains a leading oil and gas province in Australia.

Mid-cap developer Beach Energy (ASX:BPT) recently picked up Senex Energy’s (ASX:SXY) Western Flank assets, leaving Beach as the only Western Flank operator.

While the company has said it plans to temporarily slow activity to integrate all data to date, it will seek to maintain gross average output above 20,000 barrels of oil per day.

Additionally, Beach has already identified more than 60 exploration and appraisal drilling targets.

Next week, Vintage Energy (ASX:VEN) expects to re-start completion works at its Vali-1 ST well that flowed gas at a rate of 4.3 million standard cubic feet (MMscf) of gas per day during testing in August.

This will then be connected into the Moomba gathering system and begin delivering cash flow to the company, which is likely to occur in 2021.

East coast coal seam gas

Over in Queensland, Central Petroleum (ASX:CTP) is focusing on bringing its Range coal seam gas project in the Surat Basin towards FID by the end of 2021.

Along with JV partner Incitec Pivot, the company plans to drill a three-well appraisal pilot program in the first half of 2021 while seeking approvals and permits for a development that will produce 270 petajoules of gas.

Comet Ridge (ASX:COI) is also looking to progress its Mahalo CSG hub in the Bowen Basin towards FID next year.

The company is planning to drill further wells to add more reserves and a lateral pilot well to provide additional data points for both the Mahalo North and Mahalo East.

Likewise Galilee Energy (ASX:GLL) is also driving to achieve FID for its Glenaras project in the Galilee Basin.

Otway Basin

Otway Energy and Vintage have started procurement of long lead items required for the flow testing of the Nangwarry-1 gas well in late January or early February.

This will include a short test of the mid-Pretty Hill sandstone followed by a move into the shallower zone and testing the individual sands in the interpreted carbon dioxide column at the top of Pretty Hill.

While Nangwarry-1 is located in South Australia, the project stretches across the border into Victoria.

Perth Basin

The success of the Waitsia gas field and the successful West Erregulla-2 gas discovery have sparked off a flurry of activity in the Perth Basin.

Beach and Mitsui could approve the second stage development of the Waitsia gas field before the end of the current calendar year, which will kick off a whole spate of activity.

These include expansion of the existing Waitsia gas facility that will pave the way for gas to be exported through the North West Shelf in late 2023.

Meanwhile, Strike Energy (ASX:STX) and Warrego Energy (ASX:WGO) are poised to drill the West Erregulla-4 and West Erregulla-5 wells next year to appraise the reservoir distribution in the central block where the highly successful West Erregulla-2 was located.

The partners are also expected to sanction the initial phase of their planned gas development.

Once the West Erregulla wells are completed, Strike will move on to drill the Walyering-5 appraisal well with Talon Petroleum (ASX:TPD).

This targets an in-place best estimate prospective resource net to Talon of up to 38.7 billion cubic feet of gas and 0.98 million barrels of condensate.

Towards the middle of the year, Mineral Resources (ASX:MIN) and Norwest Energy (ASX:NWE) plan to drill the Lockyer Deep-1 well that targets the same Permian Kingia and High Cliff intersected by West Erregulla-2.

Vintage also plans to drill a well targeting the Cervantes oil prospect, which is located in a gap between the oil discovery trend of the Hovea, Jingemia and Cliff Head oil fields.

Overseas activity

Over in Cuba, Melbana Energy (ASX:MAY) continues to gear up to kick start the first of two wells that it will drill at its Block 9 acreage.

Alameda-1 is the highest ranked prospect in Block 9 and lies in a similar structural position to the largest oil field in Cuba, Varadero, approximately 35km away.

This has three targets that have been independently assessed to have a total Prospective Resource of 141 million barrels of oil.

It has a 32 per cent chance of success, higher than usual in oil and gas exploration as it is targeting the same structure tested in 1980s by the Marti-5 well that recorded oil shows over an 850m gross interval.

Alameda-1 will be followed up by the drilling of Zapato-1, which also carries a relatively high chance of success at 23% as it is seeking the source of Cuba’s oldest oil field, Motembo.

Invictus Energy (ASX:IVZ) expects to carry out a seismic survey over its Cabora Bassa project in Zimbabwe in 2021 once the rainy season has concluded, the first in the country for 30 years.

This will be followed by a high-impact drilling program to test the petroleum potential of the Basin.

Cabora Bassa project has the potential to host multi-trillion cubic feet of gas that could alleviate the energy shortages that are hampering industry and economic growth in South Africa.

At Stockhead we tell it like it is. While Invictus Energy is a Stockhead advertiser, it did not sponsor this article.