Global oil finds are falling far behind current consumption levels

Global Oil Production and the Shrinking Discovery Rate

Oil production worldwide is operating at maximum capacity, yet the rate of new discoveries is failing to keep pace with consumption. Data from Rystad Energy, a Norwegian consultancy, reveals that while the early 2010s saw annual conventional oil discoveries exceeding 20 billion barrels of oil equivalent (boe), this figure has dropped to just above 8 billion boe per year since 2020.

Declining Discoveries Despite High Demand

Over the last decade, the volume of newly discovered oil reserves has plummeted. Even with notable finds in countries like Guyana, Suriname, and Namibia, the average annual discovery since 2020 remains just over 8 billion boe. Rystad Energy notes that between 2023 and late 2024, this average fell further to about 5.5 billion boe, highlighting the challenges facing exploration as global oil demand stays near record highs.

Another Rystad analysis shows that recent conventional discoveries are replacing less than a third of yearly oil production, emphasizing a growing shortfall. This gap is increasingly being bridged by unconventional sources, improved recovery methods in aging fields, or the need for greater long-term investment.

Investment Trends and Strategic Shifts

Exploration budgets have been drastically reduced since the mid-2010s, with spending expected to fall to $50–60 billion in 2025, a sharp decline from the $115 billion peak in 2013. This is only a small fraction of the $500–540 billion per year estimated to be necessary to avoid supply shortages and meet future needs.

Rystad attributes this decline not only to budget cuts but also to a strategic realignment. Exploration and production companies are now targeting high-potential basins—such as Suriname’s deepwater, Namibia’s Orange Basin, and Brazil’s pre-salt regions—while moving away from mature, less profitable areas. Modern exploration efforts prioritize nearby, cost-effective tiebacks, advanced subsurface data, existing infrastructure, and digital tools to reduce risk and enhance returns.

Related: India Receives Limited Venezuelan Oil as Most Flows to U.S.

Source: Rystad Energy

Geographic Concentration and Evolving Exploration Hotspots

Recent discoveries are increasingly concentrated in a few nations—such as Namibia, Guyana, Brazil, and Suriname—demonstrating a narrowing field of exploration success. For emerging oil producers, this presents an opportunity to attract foreign investment through favorable policies, boosting revenue and energy security. Meanwhile, established producers are exploring underdeveloped plays, like ultra-deepwater or untapped stratigraphic traps, to secure long-term growth and slow production declines.

Breakthrough Discoveries: Transforming the Oil Industry

Brazil’s Pre-Salt Revolution

The 2006 discovery of the Tupi (now Lula) field in Brazil’s Santos Basin marked a turning point for the industry. Hidden beneath nearly 2,000 meters of water and another 2,000 meters of salt, this massive reserve was unlocked using advanced seismic imaging, proving that previously unreachable geological formations could be tapped. The field is estimated to contain 5–8 billion boe, located about 7,000 meters below the ocean surface. Innovative drilling and imaging techniques, including 3D seismic surveys and nuclear magnetic resonance logging, were crucial in mapping and evaluating the reservoir.

Guyana and Suriname: A New Frontier

The next major breakthrough came in 2015, when ExxonMobil (NYSE:XOM) discovered the Liza-1 field offshore Guyana. This find revealed over 295 feet (90 meters) of high-quality oil-bearing sandstone at a depth of 5,719 feet (1,743 meters) of water. The region, previously known for a string of dry wells, was transformed by this discovery. ExxonMobil utilized cutting-edge seismic imaging and high-performance computing to accurately identify and assess the reservoir, enabling rapid and informed exploration decisions.

Namibia’s Orange Basin: The Latest Hotspot

Namibia’s Orange Basin has recently emerged as a promising petroleum province, with Shell (NYSE:SHEL), TotalEnergies (NYSE:TTE), and Galp Energia (OTCPK:GLPEF) leading the way. Advanced 3D seismic acquisition and processing were essential for mapping deep subsurface structures. Drilling in these challenging environments relied on high-capacity rigs and drillships, such as the Deepsea Bollsta, Deepsea Mira, and Noble Venturer. Sophisticated geochemical analyses and comprehensive wireline logging helped confirm the quality and properties of the reservoirs.

By Alex Kimani for Oilprice.com

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