Out-Law News 1 min. read

New oil discoveries 'at their lowest for 60 years', says consultancy


New global oil discoveries fell to their lowest annual volume since 1954 last year, according to figures seen by the Financial Times.

Exploration and production (E&P) firms reported discoveries of 2.8 billion barrels worth of "crude and related liquids", the FT reported. The figures, which the paper said reflected "a slowdown in exploration activity as hard-pressed oil companies seek to conserve cash", were provided by consultancy firm IHS.

The UK oil and gas industry has already reported that it expects to approve less than £1 billion to spend on new E&P projects this year, a "significant drop" from the £8bn spent on average over the past five years. Industry body Oil and Gas UK said that government action was "critical" to improve UK competitiveness and encourage investment in recovery of the 20 billion barrels of oil equivalent (boe) remaining in the North Sea.

The UK is currently the largest producer of oil and the second largest of natural gas within the EU, but decreasing investment in both industries is likely to lead to lower production in the future, according to analysis produced by the US Energy Information Administration (EIA) earlier this year. In addition, the discovery of new reserves has not kept pace with the maturation of existing fields.

Research by energy consultancy Wood Mackenzie earlier this year found that planned energy investment worth $380 billion had been delayed globally since the oil price crash of 2014. At the time, it said that this was the equivalent of 2.9 million boe per day being deferred to early next decade. Last month, the consultancy said that the global oil market faced a supply shortfall of around 4.5m boe per day by 2035 unless exploration and discovery increased.

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