The world is on track to run out of sufficient oil supplies to meet its needs through 2050, despite lower future demand due to the Covid-19 pandemic and the accelerating energy transition – unless exploration speeds up significantly and capital expenditure of at least $3 trillion is put to the task, a bombshell report by Rystad Energy reveals.
To meet the global cumulative demand over the next 30 years, undeveloped and undiscovered resources totaling 313 billion barrels of oil need to be added to currently producing assets. Rystad Energy calculates that to match this requirement, exploration programs will have to discover a worthy-to-develop resource of 139 billion new barrels of liquids by 2050, an impossible task if this decade’s low exploration activity levels persist.
The target is high because not all existing discovered volumes are profitable to develop. In theory, the total undeveloped supply would amount to 248 billion barrels of oil between 2021 and 2050. However, when we dive deeper into these discoveries and look at their discovery decade and current status, we find that about 74 billion barrels are highly unlikely to materialize and need to be replaced by new discoveries.
Looking at the global conventional exploration potential, there are two main sources for these new volumes: further appraisal of existing fields and resources, and new discoveries.
The first source includes projects in their early production stage, projects under development, and unrisked volumes in discovered assets. We expect that some future exploration activity will lead to reservoir delineation and enhancement of resource estimates, while technological improvements and other secondary recovery techniques will also increase recoverable volumes.
Projects in the above-mentioned categories are currently forecast to contribute around 378 billion barrels of liquids supply between 2021 and 2050…
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