Exploration of new crude oil deposits has fallen to its lowest level in over 60 years, pointing out the potential lack of the fossil fuel within the coming decade.
In 2015, oil exploration discovered 2.8 billion barrels and associated liquids, according to IHS company data. It is the lowest annual discovered volume since 1954, which clearly reflects declining exploration operations, as oil companies are keen on cutting their expenses.
Most of the newly discovered crude deposits are deepwater. It takes seven years, on average, to develop such deposits and begin producing oil from them, therefore, current exploration results could lead to a supply shortage in the mid-2020’s.
At the same time, less exploration operations does not point to there being less crude oil in the world. According to Wood Mackenzie, the larger part of additions to oil production this year came from existing oilfields and not newly discovered ones. Besides, of the recently discovered deposits natural gas is predominant to oil.
Nonetheless, experts at Wood Mackenzie believe that if the rate of new deposits’ discoveries doesn’t pick up, it could lead to a global deficit of about 4.5 million barrels a day by 2035, which, in turn, will cause a surge in oil prices make the world more dependent on onshore fields, with an already known resource volume.
Paal Kibsgaard, Schlumberger’s CEO, mentioned in April that the correlation between crude oil exploration and production is so great that it could only speed up a decline in produced volume, leading to higher prices.
A steep fall in oil prices, that began in 2014, led many producers to cut their expenses. Exploration took the biggest hit, as this type of expense isn’t expected to cause an immediate effect. ConocoPhillips, for example, has rejected exploration altogether, while Chevron and a number of other companies substantially curbed their operations.