New research conducted by Rystad Energy reveals that discoverable volumes of oil and gas are at an all-time low amid increased spending on oil and gas exploration.
According to the company, explorers found 42 per cent less oil in H1 2023 compared to the same period last year.
4.5 billion barrels of oil equivalent were discovered in the first half of 2022, however, Rystad Energy’s estimates show that only 2.6 billion barrels of oil equivalent were found in H1 2023.
Rystad Energy Vice President of Upstream Research Aatisha Mahajan said: ”Upstream companies are facing a period of uncertainty. They are eager to capitalize on the increased demand for fossil fuels and find additional resources, but recent results have been lackluster.
“If exploration efforts continue to yield unimpressive results for the remainder of the year, 2023 could be a record-breaker for the wrong reasons.”
Many companies in the exploration and production (E&P) industry are shifting strategies to explore more profitable and familiar regions.
Rystad Energy believes that this shift contributed to the drop in discoveries.
In search of new resources, exploration companies are investing in costly high-risk offshore developments — capitalising on underexplored or frontier areas.
The offshore sector is responsible for approximately 95 per cent of exploration spending this year to date.
However, the industry has only accounted for around two-thirds of discovered resources.
The reserves in Guyana, Turkey, Nigeria and Namibia continue to grow as 603 million barrels of oil equivalent were secured in Guyana’s Stabroek offshore block this year.
The remaining three countries currently hold the rankings of:
- Turkey (second) with 380 million barrels of oil equivalent
- Nigeria (third) with 296 million barrels of oil equivalent
- Namibia (fourth) with 287 million barrels of oil equivalent
Rystad Energy estimates that these figures will increase in proportion to the growing understanding of these reserves.